The US Chips Act has not only been a success - it’s sparked a multibillion-dollar investment boom

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More than halfway through its incentives spending, the US will have far greater scope to manage shocks

US statistics show a stunning fifteenfold increase in construction of manufacturing facilities for computing and electronics devices. Photograph: Getty ImagesWith recent multibillion-dollar grants to Intel, TSMC, Samsung and Micron, the US government has now spent more than half its $39 billion in Chips Act incentives. In so doing it has driven an unexpected investment boom.

The investment surge this has driven is reducing these vulnerabilities. Samsung, TSMC and Intel – the world’s leading chipmakers – are now building large new plants in the US.Intel will manufacture its most advanced chips there, while TSMC will introduce its cutting-edge two-nanometre process in Arizona around two years after bringing it online in Taiwan.

As the pandemic-era shortages showed, it is not only advanced chips that are economically critical. Manufacturers of cars, missiles and medical devices require large volumes of foundational chips as well. Here, too, the Chips Act is providing significant new supply. TSMC plans high-volume chip production in its first Arizona plant early next year. If the chip market softens, some plants could get postponed, but the disbursement of grants is tied to progress in bringing fabs online.

 

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