What it is
The Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, signed into law in August 2022, provides approximately $52.7 billion in federal funding over five years. Its primary goal is to revitalize and expand semiconductor manufacturing capabilities within the United States. This includes grants, loans, and loan guarantees for companies building new fabs or expanding existing ones, as well as funding for research and development initiatives and workforce training programs crucial for the industry.
The CHIPS Act directly impacts the global semiconductor supply chain by encouraging companies like Intel, TSMC, and Samsung to invest in U.S. production facilities. Market participants track announcements of conditional awards and groundbreaking ceremonies as indicators of capital expenditure and future production capacity. The policy aims to reduce reliance on foreign manufacturing, particularly from Asia, thereby enhancing national security and economic resilience in critical technology sectors.
Why it matters
The CHIPS Act influences where and how chips are made, affecting supply chain stability and the long-term growth prospects of semiconductor companies. It signals government commitment to the sector.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice