Biden to sign chip bill to boost satellite supply chains

TAMPA, Fla. — A bill that would provide $52 billion in subsidies to U.S. chipmakers promises to galvanize domestic production, though it will take time to ease a semiconductor shortage that has delayed satellite projects .

US President Biden is expected to sign the bill, dubbed the Flea Law and Science, after passing House and Senate votes last week. It includes $280 billion in total support for US manufacturing and technology capabilities.

The legislation aims to boost US competitiveness in the global semiconductor market with subsidies, tax credits and other incentives in response to China’s growing dominance in the sector.

It also comes as the lack of chips and other spacecraft components during the pandemic has slowed satellite projects and increased costs.

But while there will be a lag time between the bill’s approval and when new manufacturing facilities can come online to improve supply, reducing the United States’ reliance on foreign suppliers also has security implications.

Nearly four-fifths of global manufacturing capacity was in Asia in 2019, according to the US Congressional Research Service.

Although figures show China has 12% of global capacity, the US-based Semiconductor Industry Association said last year that China’s investment in the sector puts the country on the right path to control the largest share of global production by 2030.

Meanwhile, the Congressional Research Service said the United States’ share of semiconductor manufacturing capacity has fallen from about 40% in 1990 to 12% in 2020.

The most advanced types of chips are also largely made in Taiwan, which is the subject of growing political tensions with China.

“Space applications are an area where a secure and reliable source of chips is critical to mission success,” said Zachary Collier, assistant professor at Radford University in Virginia.

Reducing reliance on foreign suppliers would help ensure that chips are not tampered with in a way that could affect their integrity and reliability, which Collier says “could result in the death or failure of a mission during a manned space flight, or unauthorized access to sensitive satellite data”. ”

He said: “Increasing domestic manufacturing capacity is an important step towards building a secure and reliable end-to-end semiconductor ecosystem, which is needed to support space, defense, critical infrastructure and many other sectors.”

Relocating manufacturing capabilities will increase supply chain traceability, Collier added, and it is necessary to know where the chips are and who handled them throughout their life cycle “to ensure that components used in space applications are secure”.

Jim Taiclet, CEO of satellite maker Lockheed Martin, told President Biden at a White House event on July 26 that a secure supply of chips is critical to national security and the industry’s industrial base. aerospace.

“We must have confidence in the security of the material itself – that it has not been tampered with or degraded when we receive it and put it in our planes, missiles, satellites, etc.,” Taiclet said according to a transcript from the White House.

Along with nearly all Democrats, 24 Republicans in the House and 17 in the Senate voted to pass the legislation, titled Creating Helpful Semiconductor Production Incentives (CHIPS) and Science Act.

Critics of the bill say it will contribute to record inflation and have questioned whether cash-rich semiconductor companies should be subsidized.

“The five largest semiconductor companies likely to receive the lion’s share of this taxpayer relief, Intel, Texas Instruments, Micron Technology, Global Foundries and Samsung, made $70 billion in profits last year,” said Sen. Bernie Sanders, an independent from Vermont. , said in a July 15 statement.

“Does it seem like these businesses really need social assistance?”

The legislation also authorizes about $100 billion in spending over five years for scientific research.

Comments are closed.