The 'Biggest Single Bet' In Decades: America's $40 Billion Gamble On Chips Pays Off

Biden administration officials are racing to finalize nearly $40 billion in semiconductor funding before leaving office, marking what The Economist calls “arguably the biggest single bet on industrial policy by the government in decades.”

The Department of Commerce’s aggressive disbursement of CHIPS Act money has already reshaped America’s semiconductor landscape. According to Commerce Secretary Gina Raimondo, private investments have reached $450 billion, with manufacturing giants like Intel, TSMC and Samsung breaking ground on new facilities nationwide.

“I see it as getting the job done efficiently with taxpayer money,” Raimondo told The Economist, dismissing concerns about the rushed timeline. The funding sprint comes as President-elect Donald Trump, who called CHIPS a “bad deal,” prepares to take office next week.

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Early returns suggest the gamble is paying off. The Semiconductor Industry Association reports that America’s share of advanced chip production, nearly nonexistent in 2022, is projected to reach 28% of global capacity by 2032.

The funding has helped narrow a crucial cost gap. Historically, building and operating chip plants in America cost 30% more than in Asia. CHIPS money and tax incentives have made U.S. manufacturing more competitive.

A Tech Target report issued this week notes that six companies have secured the largest awards: Intel ($7.9 billion), TSMC ($6.6 billion), Micron ($6.2 billion), Samsung ($4.7 billion), Texas Instruments ($1.6 billion) and GlobalFoundries ($1.5 billion). To receive the funds, companies must meet specific production milestones.

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Industry experts warn that maintaining momentum requires long-term commitment. “We should be sober about how challenging it will be to keep the investment going,” Chris Miller, author of “Chip War,” told The Economist. China continues massive investments in its semiconductor industry, while companies like TSMC spend over $30 billion annually on manufacturing upgrades.

The program’s success has revitalized the Commerce Department’s role in industrial policy. Once housing the world’s largest office building, the department had faded into handling routine trade missions before CHIPS restored its strategic importance.

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