Supply Chain Security
Semiconductors power everything from cars and phones to weapons systems, and supporters say domestic production reduces U.S. dependence on factories concentrated in Asia.
In plain English
Bringing computer chip production back home.
It's a 2022 law that puts tens of billions of federal dollars toward building computer chip factories and doing tech research inside the United States, rather than relying on overseas suppliers.
Simple example
Companies including Intel, TSMC, Micron, and Samsung have received CHIPS Act funding awards to build or expand semiconductor plants in states such as Arizona, Ohio, New York, and Texas.
Why it matters
What the term actually changes.
Cost To Taxpayers
The law commits substantial federal spending and tax breaks, and debate continues over whether subsidies effectively boost U.S. industry or amount to corporate giveaways.
How it works
The mechanics, in practice.
Grants And Tax Credits
The Commerce Department reviews company applications and awards funding for new fabrication plants, while a 25% investment tax credit offsets manufacturing equipment costs.
Conditions On Recipients
Companies receiving funds face restrictions on expanding advanced chip production in China and must meet requirements on workforce, child care, and project milestones.
Related guide
Should the U.S. restrict trade with China for national-security reasons?
A look at the tools, stakes, and trade-offs behind U.S. economic policy toward China.
Read the guide → Related issue brief
Should the U.S. restrict trade with China for national-security reasons?
Lawmakers and economists are divided over how far Washington should go in limiting commerce with Beijing to safeguard sensitive technologies and supply chains.
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Should the U.S. restrict trade with China for national-security reasons?
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