Nearly $53 Billion in Federal Funding Could Revive the U.S. Computer Chip Industry

The legislation includes nearly $53 billion in funding to encourage domestic manufacture of semiconductor chips, as well as continued research into this field.

"CHIPS" stands for "Creating Helpful Incentives to Produce Semiconductors," but the act goes beyond computer components: it proposes big funding increases for the Department of Energy's Office of Science, the National Science Foundation and the National Institute of Standards and Technology.

Because so many fields rely on computer chips, the new law's effects will go well beyond the semiconductor industry, says Russell Harrison, acting managing director of the U.S. branch of the Institute of Electrical and Electronics Engineers, who has been consulting with politicians on the legislation for the past few years.

Within the chip industry, you differentiate between legacy chips, which are the reliable chips that have been around for a while, and then cutting-edge chips.

The CHIPS bill is mostly focused on the really high-end cutting-edge chips, although there's some language in there for the legacy chips.

So looking just at the really high-end chips: artificial intelligence, obviously, is going to be "The faster, the better" for that industry.

Finance actually needs a lot of high-end chip computing power.

The automobile industry relies on an increasing number of computer chips, but they tend not to be the really cutting-edge chips.

Could the CHIPS and Science Act reduce U.S. reliance on international chip production?

The CHIPS Act intentionally tries to pull the parts of the country that aren't involved into this industry and into this work.