For weeks, the US Senate has been arguing about how to proceed with the Chips Act. Here are some reasons why the law is important, both for the US and for Europe.
More production in the USA; Image: Trenton Systems
The main reason for the law is a competition between China and the USA. Because if China stops supplying chips, the U.S. has a big problem. Senator John Cornyn, Republican, wrote on Twitter that GDP could fall 3.2% in the first year and 2.4 million jobs could be lost.
The global chip shortage is also a factor that this law will be implemented. This is because many chips are produced in Asia and shipped to the world. Then when the world was put into lockdown, chips became scarce - the US wants to prevent that with this law. So the EU can also benefit, because the U.S. maintains trade alliances with the Union.
So the Senate wants to distribute $52 billion to chip manufacturers in the country to be able to produce competitively. The companies are also supposed to pay less taxes. The final bill, however, is not yet completely set.
Intel, of course, has a great interest in this bill. The construction of the chip factory in Ohio was stopped - according to Intel because of the Chips Act. Intel is still waiting for the Senate's verdict and if the bill passes, Intel will build the largest manufacturing plant in the entire company. However, it's not clear how much of a stake Intel will have in the law.
