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Where Politics and Science Meet


Where Politics and Science Meet

Peet van Biljon shares a blog and some exciting news about the launch of his new book and an accompanying blog on innovation, management, and policy.

Whether in mobile phones, data centers, or cars – microchips are everywhere, and ongoing shortages affect countless industries worldwide. To boost innovation in the United States, Joe Biden recently signed the $280bn CHIPS and Science Act 2022, of which a large part, $52.7bn, is earmarked for the semiconductor industry. What justifies such an enormous government investment in one industry?

Our modern economy runs on semiconductors – materials, such as silicon or germanium, treated to have special electrical properties – that serve as the basis for most electronics. They appear as discrete devices such as power transistors and diodes, and as integrated circuits in the form of microprocessors or memory chips. These chips are typically manufactured as wafers and contain thousands to billions of devices, mainly transistors.

An exponential growth in chip complexity over the last few decades has enabled our digital age and many of the functions we take for granted, such as video gaming, broadband wireless, and artificial intelligence. The smartphone in your pocket today has far more computing power than NASA used for the 1969 Apollo moon mission.

In light of the technology’s vital and growing importance, US president Joe Biden recently signed the CHIPS and Science Act 2022, which entails a historic investment to boost semiconductor research and production in the United States.


The CHIPS and Science Act of 2022 injects $280 billion into US research, innovation, and manufacturing over the next five years. The “CHIPS” name reflects the priority given to the semiconductor industry with $52.7 billion of dedicated semiconductor spending, including $39 billion in grants and a 25% tax credit for on-shore US manufacturing.

The policy goal is to increase the US manufacturing share of this crucial technology after years of decline – from 37% in 1990 to 12% (relative to the US semiconductor consumption of 34%) – mostly due to more aggressive industry investments by other governments. The Act also reflects the urgency of addressing semiconductor shortages and cyclic dynamics which trouble multiple industries (for example, automotive manufacturing) and impede US economic growth.

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