The Impact of the CHIPS Act on the Semiconductor Shortage

BALTIMORE, MD, August 3, 2022 – New audio is available for media use featuring Zachary Collier. Zachary Collier is an assistant professor in the Department of Management at Radford University. He speaks about the impact of the CHIPS Act on the semiconductor shortage. This content is made available by INFORMS, the largest association for the decision and data sciences. What follows are 4 questions and responses. These responses were provided on August 3, 2022.

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Question 1: How would you describe the current semiconductor shortage as part of the global supply chain problem?

Time Cue: 0:21, Soundbite Duration: :24 

“The current semiconductor shortage plays an important role in today’s global supply chain problems, directly impacting many other industries like automotive manufacturing and household appliances. In today’s digitally enabled world, nearly everything runs on chips. Semiconductors are the fourth-most traded commodity in the world and are up there with oil in terms of how important they are for the functioning of the global economy.”  

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Question 2: What are the national security implications? 

Time Cue: :53, Soundbite Duration: :28

“When the United States is dependent upon foreign suppliers of chips, it puts us in a vulnerable position, both from an economic and a security perspective. Foreign dependence for semiconductors puts the nation at risk for supply chain disruptions, security vulnerabilities, and intellectual property theft. We don’t want most of the chips that power our critical infrastructure and defense systems to be made by countries who might not have our best interests in mind.”

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Question 3: What does the CHIPS Act hope to achieve? 

Time Cue: 01:27, Soundbite Duration: :25

“The intent of the CHIPS Act is to provide incentives to make the United States more globally competitive in the semiconductor research and manufacturing space and create a semiconductor ecosystem that can support the nation’s strategic economic and national security objectives. Offering one-time grants and tax credits for companies to construct manufacturing facilities at home will boost our domestic production as well as create jobs in this important area.”

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Question 4: How soon can American industry and consumers expect to see improvements in the semiconductor supply chain as a result of the CHIPS Act and other measures? 

Time Cue: 01:56, Soundbite Duration: :23 

“Semiconductor manufacturing facilities take a long time to build, and so there will naturally be a lag time between the passage of the CHIPS Act and when new facilities will begin to produce chips. The CHIPS Act is an important strategic policy step toward strengthening our domestic manufacturing base and ensuring that we remain technologically competitive on the international stage.”

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