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Important points
- The White House announced Friday that it will invest $5 billion in research, development and workforce needs centered on semiconductors as part of the CHIPS and Science Act.
- The announcement is the latest step in the CHIPS and Science Act of 2022, which aims to support U.S. chip manufacturing and make it more competitive.
- The move comes amid soaring demand for chips to power artificial intelligence (AI) systems.
President Joe Biden’s administration is investing more than $5 billion in semiconductor-related developments to shore up the U.S. chip industry as demand for artificial intelligence (AI) technology hardware soars.
The administration announced Friday that the funding will go towards semiconductor research and development (R&D) and workforce development for the industry. The announcement is the latest step in the CHIPS and Science Act of 2022, which created the largest publicly funded research and development program in U.S. history to support chip manufacturing in the United States and reduce dependence on other countries.
“These investments advance U.S. leadership in semiconductor research and development, reduce the time and cost of commercializing new technologies, strengthen America’s national security, and ensure good semiconductor jobs,” the White House said. We will connect and support workers to achieve this goal.”
In December, the White House announced the first grants under the CHIPS and Science Act. Defense contractor BAE Systems (BAESY) received $35 million to modernize its aging factory in Nashua, New Hampshire. This move boosted the stock prices of chipmakers such as Intel (INTC) and Advanced Micro Devices (AMD) at the time.
Last month, the Department of Commerce also announced $162 million in federal CHIPS Act funding to Microchip Technology (MCHP) to expand chip production.
Semiconductor stocks including Intel, AMD, Nvidia and Broadcom (AVGO) rose on Friday on the news. The PHLX Semiconductor Index is up more than 50% over the past year.
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