Biden to sign $52 billion CHIPS law implementation executive order

By Al-Mayadeen English
Source: Agencies
25 Aug 2022 17:39

The signing of the order which will provide subsidies worth $52 billion for the microchips industry is scheduled today.

President Joe Biden holds up a microchip during a meeting with lawmakers to discuss U.S. supply chains, in the Oval Office of the White House, Wednesday, Feb. 24, 2021, in Washington (AP Photo/Evan Vucci)

US President Joe Biden will sign an executive order on Thursday to implement the CHIPS and Science Act of 2022, sources reported.

The $280 billion industrial policy bill, which Biden signed into law two weeks ago, includes more than $52 billion in subsidies for US semiconductor manufacturers in an effort to counter China's technological prowess.

The executive order will set up a 16-member steering council co-chaired by National Economic Council Director Brian Deese, National Security Adviser Jake Sullivan, and Office of Science and Technology Policy Acting Director Alondra Nelson, sources reported. Other members will be further drawn from Biden’s national security and economics teams. The executive order will also set out Biden’s six priorities for the implementation process.

Lawmakers passed the legislation in late July amid a global semiconductor shortage linked to the disruption of supply chains by the COVID-19 pandemic measures and sanctions, among other factors. The shortage has affected several economic sectors particularly hard, including the automotive, electronics and energy industries.

Aside from initiatives to promote Science, Technology, Engineering, and Math (STEM) research and development, the Chips Act for the US includes what Pelosi called "strong guardrails", including banning firms from using funds awarded through the act for stock buybacks or dividend payments and companies who received federal financial support from engaging in particular expansions of semiconductor manufacturing in countries of concern.

These firms are also requested to inform the Department of Commerce of any plans for significant transactions that may breach the agreement. Congress will keep tight control over federal funds that support the domestic production of semiconductors.

The US has also in recent months increased efforts to strengthen technological cooperation with countries including South Korea and Japan to create semiconductor supply chains that bypass China.