‘Supply, jobs, education’…3 effects of US semiconductor law on ordinary citizens

US President Joe Biden signed the ‘Semiconductor Industry Promotion Act (CHIPS and Science Act)’ this week. It is a $280 billion bill to promote the construction of semiconductor manufacturing plants in the United States. The general public, except for those working in the semiconductor industry or experts who analyze geopolitical situations, may not pay much attention to the bill. However, the legislation could provide direct or indirect benefits to the American citizenry while increasing America’s presence in semiconductor manufacturing. There are three main things worth noting:
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Stable semiconductor supply

Currently, semiconductor manufacturing is mostly led by East Asian countries. Before the Corona crisis, the global economy was closely connected with each other and each country was interdependent. This structure worked well, so even if physical production was concentrated in one area, it was possible to achieve high economic efficiency without any problems. It didn’t matter if the processor design company’s final product was far across the sea.

However, things have changed after the corona crisis. Due to disruptions in the supply chain, including delivery problems, it has become difficult to obtain products that use electronic components in a variety of ways, such as electronic products or automobiles. People who assemble and upgrade PCs themselves are not at a level where parts are temporarily out of stock. Demand was high but supply was insufficient, causing prices to skyrocket, eventually leading to problems in many places.

If processor production in the US increases, the damage will be small if certain events affecting the world or political tensions between countries increase. In other words, goods can be produced more reliably and without fluctuations. When a catastrophic situation occurs, the likelihood of a sharp rise in consumer prices is reduced. Negative problems that occur at a time when general consumption decreases due to factors such as recession or inflation can also be alleviated.

job growth in the US

Processors marked ‘Made in USA’ will have to wait at least a few years before production. However, factory establishment itself starts much earlier, and job opportunities can increase immediately in areas where factories are naturally built. When the plant is completed, the number of employees in various fields such as technicians, engineers and production managers will also increase.

Not only that. Where workers flock, demand for various services and housing increases, creating new job opportunities in a chain. Because many economic effects can be expected, New York State suggestIt is expected that more local governments will offer policies similar to one ‘$10 billion tax benefit’.

Although the core of the semiconductor industry promotion law is related to manufacturing plants, there are many other notable elements. First, $13 billion of the budget will be used for research and development and workforce development, and $500 million will be used to address security and supply chain issues. New opportunities related to this may also arise.

Of course, not everyone needs a new job. However, if you live in an area near a semiconductor manufacturing plant, the income earned in that area can have a positive impact on your life. Already, $10 billion in investments has been allocated to innovation and tech hubs like Silicon Valley, Seattle and Austin. If there are more similar technology-focused areas, the opportunities available to ordinary citizens will be more diverse.

Increase investment in education

According to the semiconductor law, only 20% of the budget is used for semiconductor production-related activities. The rest is focused on revitalizing technology-related R&D. Government departments will invest the funds into advanced communication technologies such as quantum information science, artificial intelligence, cybersecurity, and 6G. For these national efforts to bear fruit, new manpower must flow in over time. The US government plans to invest about $13 billion to increase research participation in science and engineering fields. Through this, the foundation will be created so that relevant talents can emerge from the underprivileged, such as rural residents, women, and minorities, who have not had easy access to high-quality science and engineering education.

white house official presentationAccording to the report, investment in education encompasses various stages such as kindergarten, elementary/middle/high school, college, university, and graduate school. The problem is the details. The U.S. government must allocate its budget wisely in such a way that ordinary people can reap real benefits. That way, it could affect the entire economy more than just producing semiconductors.
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Source: ITWorld Korea by www.itworld.co.kr.

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