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The chips bill is one in a slew of legislative wins for the White House in recent weeks. Senate Democrats on Sunday passed a sweeping climate and spending bill -- a slimmed down version of Biden’s Build Back Better agenda -- after lawmakers also approved veterans health and gun-safety bills with bipartisan support.

Biden was joined at the signing by Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi.

The legislation first passed the Senate in June 2021 but lingered in the House for months, and it took more than one year to reconcile the two chambers’ versions. Some Senate Democrats had criticized the White House for not pushing the House and Pelosi to get the legislation over the finish line sooner.

Overseas Reliance

The chips bill is at the center of the Biden administration’s effort to reduce dependence on Asian suppliers like Taiwan and South Korea, whose homegrown companies are leading the market, and to address supply-chain disruptions and resulting price hikes for certain goods containing semiconductors.

Biden’s team and lawmakers have stressed the national security implications of the bill, saying it was vital to competing with and countering China.

A large chunk of the federal grant is expected to go to Intel, Taiwan Semiconductor Manufacturing Co. and South Korea’s Samsung Electronics Co., all of which are now building new chip fabrication facilities worth tens of billions of dollars in the US.

US to Stop TSMC, Intel From Adding Advanced Chip Fabs in China

The bill also includes important caveats sought by Republicans and China hawks: Companies that receive the funding have to promise not to increase their production of advanced chips in China.

It was a condition made by lawmakers and the White House and was included in the measure over the objection of some chipmakers. Intel, in particular, was lobbying hard against the prohibitions. In late 2021, the American chipmaker wanted to increase production in China, but the plan was rejected by the Biden administration.

While China’s chipmaking champion Semiconductor Manufacturing International Corp. can make chips that are more advanced than 28 nanometers, its technology is still at least six years behind industry leader TSMC.

Micron’s Mehrotra said earlier Tuesday that “today less than one in 50 chips, memory chips in the world, are produced in the US. With Micron’s commitment, it will enable us to produce one in 10 chips of the global memory consumption here in the US.”

The legislation “solidifies long term technology and manufacturing leadership of America,” Mehrotra said on Bloomberg Television.

(Updates with Chinese Foreign Ministry comments.)

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