How the CHIPS Act Can Impact Arkansas
In late 2019 and early 2020, as the world was grappling with the spread of COVID-19, another global crisis was lurking just behind it. A series of natural disasters, pandemic-related lockdowns, and logistics failures brought the world’s semiconductor supply chain to a grinding halt. Consumers could not purchase vehicles, and news began to break of auto manufacturer lots full of cars, ready to drive, lacking only the chips enabling the vehicles’ advanced electronic systems. Parents and schools could not purchase the laptops and tablets that children needed to participate in remote schooling. These are among the mildest examples of how the chip shortage impacted our daily lives.
The public slowly became aware that the world’s supply of semiconductors, or chips, was almost entirely being funneled through one company- the Taiwan Semiconductor Manufacturing Company (TSMC). Some of us would later learn about the history of this company and the decades of tireless work from broad stakeholders that led to its success. The fragility of our supply chain became increasingly apparent.
U.S. lawmakers got to work and crafted a few pieces of legislation to address the issue – the Endless Frontier Act, which evolved into the United States Innovation and Competition Act (USICA), was a bipartisan, bicameral solution presented in May 2020. Concurrently, former Secretary of State Keith Krach was busy negotiating terms with TMSC to keep the chips flowing. The CHIPS for America Act was introduced in June of 2020, also with bipartisan support. These bills were merged into what became the CHIPS and Science Act (HR 4346), which was ultimately signed into law in August of 2022.
The Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America and Science Act, or CHIPS+, is a sprawling piece of legislation that includes a range of strategies and programs to strengthen our domestic supply chain and workforce. CHIPS+ also earmarks more than $52 billion in Federal funding from 2023 through 2027 for those programs and strategies. The 2023 funding was finally approved in December 2022 with the passage of the FY23 Omnibus Appropriations bill, and Federal agencies are buzzing right now in preparation for a variety of new funding programs, investments, and partnerships.