Job Creation and Economic Growth: The Impact of the CHIPS Act in America

Semiconductors are essential components in various electronic devices, serving as the foundation for modern technology. Recognizing the critical importance of semiconductor manufacturing to national security and economic vitality, the United States Congress passed the CHIPS Act in 2022. This legislation, signed by President Biden, aims to bolster domestic semiconductor production, enhance global competitiveness and foster innovation.

This act and its programs have strong implications for creating jobs and growing the economy, beyond just strategic objectives.

The CHIPS Act: A Strategic Imperative

The CHIPS Act aims to boost the semiconductor industry in the US by providing incentives for production. The Act gives $52 billion to support the development and production of semiconductors.

By fostering collaboration between government, industry and academia, the CHIPS Act seeks to address supply chain vulnerabilities to reduce reliance on foreign production.

Fueling Job Creation

The CHIPS Act aims to boost domestic manufacturing and create jobs in the semiconductor industry and beyond.

From research and development to manufacturing and assembly, this industry has many specialized roles. Semiconductor fabrication facilities, or fabs, are crucial for making chips. To build or grow fabs, a skilled workforce in engineering and manufacturing is required.

Constructing a fab alone can create thousands of jobs in areas like architecture, engineering and construction. In addition, the spillover effects of the CHIPS Act extend beyond direct employment. Industries like equipment suppliers and logistics firms benefit from semiconductor production.

Microelectronics Commons Bolstering Job Opportunities

Funded by the CHIPS and Science Act, the Microelectronics Commons program, established through the Strategic & Spectrum Missions Advanced Resilient Trusted Systems (S²MARTS) Other Transaction Agreement (OTA), is a network of regional technology Hubs acting on a shared mission: to expand the nation’s global leadership in microelectronics. Through this program, the DoD is accelerating domestic prototyping and growing a pipeline of U.S.-based semiconductor talent.

A ’Hub’ in this program will connect researchers and designers to prototyping capabilities targeted to regional strengths in that Hub’s respective technical topic areas including 5G/6G Technology, Artificial Intelligence/Hardware, Commercial Leap-Ahead Technologies, Electromagnetic Warfare, Secure Edge/IoT Computing and Quantum Technology. Each Hub manages its own extended network of small and large, traditional and non-traditional, commercial innovators.

The establishment of Hubs is poised to catalyze job growth across the US. By nurturing collaboration among researchers and a diverse range of commercial innovators, Hubs create an ecosystem conducive to and technological advancement and talent.

The program trains people for semiconductor jobs, creating a need for skilled workers in areas like engineering and manufacturing. Also, Microelectronics Commons connects regional strengths to specific technical areas such as 5G/6G technology and artificial intelligence hardware. This helps spread job opportunities to different regions. It also contributes to creating a more inclusive and robust economy from New York to California.

Intel’s Investment in Arizona

In 2021, Intel Corporation announced plans to invest $20 billion in expanding its semiconductor manufacturing capacity in Arizona. The CHIPS Act is expected to enable this initiative to create over 3,000 high-wage jobs in the state. The investment will lead to the construction of two new fabs focused on advancing semiconductor manufacturing.

Intel’s expansion in Arizona exemplifies the impact of the CHIPS Act on job creation and economic growth. Intel’s investment in fabs has created jobs and attracted talent, boosting the local economy with innovation clusters. In a press release, Intel stated that ‘The current expansion is expected to create more than 3,000 high-tech, high-wage Intel jobs, along with 3,000 construction jobs. Additionally, it will support an estimated 15,000 indirect jobs within the local community.’

NeoCity In Orlando

Osceola County was recently awarded a 5-year, $120 million contract with the Department of Defense to develop NeoCity, a technology hub focusing on semiconductor manufacturing.

Through the development of this technology campus, the Orlando/Kissimmee/Sanford MSA population is expected to grow by more than 50% by 2040 and in the same period Osceola County’s growth is projected at 119%.

Neocity is bringing a significant amount of jobs to the area, contributing to this growth. “It’s anywhere from, projections from 4,000 to 16,000 direct jobs, 20,000 to 80,000 indirect jobs, because it’s more than just the one person who’s working in the lab,” said Osceola County Manager Don Fisher. “It’s the ecosystem around it.”

Economic Growth: Nurturing Innovation and Competitiveness

Semiconductors underpin many industries, from consumer electronics and automotive manufacturing to national defense.

Moreover, semiconductor innovation serves as a catalyst for technological advancement and productivity gains across the economy. From artificial intelligence and 5G connectivity to quantum computing and autonomous vehicles, semiconductor-enabled technologies drive the next wave of digital transformation. By investing in semiconductor research and development, the CHIPS Act fuels a virtuous cycle of innovation, entrepreneurship, and economic dynamism.

Technological Innovation

Increased investment in semiconductor manufacturing fosters technological advancements, leading to innovations in various industries such as automotive, healthcare, telecommunications, and consumer electronics.

Companies like Qualcomm, Nvidia, and AMD are constantly developing new technology for devices like phones, game systems, and self-driving cars. Their innovations help boost the economy.

Economic Multiplier Effect

The economic multiplier effect occurs when spending or investment increases, leading to more spending in subsequent rounds. In the context of the semiconductor industry, the multiplier effect is significant due to its interconnectedness with other industries.

Semiconductor manufacturing requires highly specialized equipment for processes like lithography, etching and testing. Companies like Applied Materials, ASML, and KLA Corporation are major suppliers of semiconductor manufacturing equipment. Manufacturers are growing their production with incentives like the CHIPS Act. This boosts equipment orders, revenue, and investment in better tools. It drives innovation and helps the economy grow.

Alongside equipment, semiconductor manufacturing relies on various materials such as silicon wafers, chemicals, gases and photomasks. Companies like JSR Corporation supply these materials to semiconductor manufacturers. Increased demand for semiconductor manufacturing leads to higher orders for these materials, benefiting material suppliers.

This is also true for many other industries that support businesses, such as software development, packaging, testing, logistics, and maintenance.

Embracing a Future of Innovation and Opportunity

The CHIPS Act represents a pivotal milestone in America’s quest for semiconductor leadership and economic resilience. The Act encourages investment in semiconductor research, design, and manufacturing, creating new jobs and boosting the economy.

Together, we can seize the moment and leverage the potential of the semiconductor industry to shape a brighter tomorrow.

About S²MARTS

The Strategic & Spectrum Missions Advanced Resilient Trusted Systems (S²MARTS), managed by NSTXL, is the premier rapid OT contracting vehicle for the Department of Defense (DoD) in trusted microelectronics, strategic & spectrum mission, and other critical mission areas. The Naval Surface Warfare Center (NSWC), Crane Division created S²MARTS to grow and engage an elite network of innovators, shorten the path to defense prototype development, and advance national security efforts.

About NSTXL

NSTXL is focused on building a network of innovators and creators across the most sought-after emerging technology fields. As an open-source platform, our approach was designed to encourage network growth and collaboration without stifling change. We support our network by providing commercial-term contracting, open-source technology discovery, modern-day marketing outreach, a strongly interconnected network for easy teaming and cybersecurity compliance support.