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CHIPS Act and the chip race
August 9, 2022· Law or policy· Laws, labor & antitrust
Well documentedSolid records, texts or physical evidence.
A 2022 US law providing about $52.7 billion to rebuild chipmaking at home, part of a global race with China.
See it on the Innovation & Wealth map →What happened
Signed August 9, 2022, it offered $39 billion in factory grants, $11 billion for research and a 25% investment tax credit, raised to 35% in 2025. The US share of world chipmaking had fallen from about 37% in 1990 to 12%. Awards went to Intel, TSMC, Samsung and Micron for plants in Arizona, Texas, Ohio and New York. That October the US also curbed exports of advanced chips and tools to China. In 2025 the government converted Intel's grants into a roughly 10% stake.
Impact on society and the economy
It marked a US return to industrial policy, using subsidies, not just markets, to decide where strategic factories get built.
How we know
The law's text, Commerce Department award announcements, company investment filings, and Semiconductor Industry Association production data.
Still debated
Whether subsidized US plants can match Asian costs and skills, and whether export controls slow China's chip industry or speed its self-reliance.
Connections (2)
▸CHIPS Act and the chip race subsidized US factories of TSMC (Morris Chang)Well documented
The connection
Under the CHIPS Act the Commerce Department awarded TSMC up to $6.6 billion in grants and up to $5 billion in loans for factories in Phoenix, Arizona. TSMC raised its planned US investment to $65 billion, then $165 billion in March 2025. Its first Arizona plant began volume production in late 2024, at higher cost than in Taiwan.
When and how
Phoenix, Arizona; plans announced 2020, award finalized November 2024, expansion announced at the White House in March 2025.
How we know
Commerce Department award announcements and TSMC's filings document the money and the production start.
Debates
Whether US-made chips can compete on cost, and whether Taiwan will keep its most advanced processes at home, as its government prefers.
▸The China shock spurred efforts to reshore industry via CHIPS Act and the chip raceMostly agreed
The connection
Factory jobs lost to Chinese competition built bipartisan support for industrial policy, and a 2021 chip shortage that idled car plants sharpened fears of depending on Asian supply chains. The CHIPS Act was sold both as competing with China and as rebuilding US manufacturing, and passed the Senate 64–33 with Republican votes.
When and how
Washington, 2020–2022; championed by Senators Chuck Schumer and Todd Young; carmakers such as Ford and GM lobbied after the shortage.
How sure are we?
The law's text and lawmakers' speeches cite China and supply-chain risk explicitly; the political link to China-shock job losses comes from economists' and political scientists' studies.
Debates
Whether highly automated chip plants, each employing a few thousand mostly skilled workers, will bring jobs back to the towns that lost them.