US Commerce Chief Hopes Chips Bill Spurs Up to $400 Billion in Investment

Eric Martin, Bloomberg News

Gina Raimondo, US commerce secretary, speaks during the SelectUSA Investment Summit in National Harbor, Maryland, US, on Monday, June 27, 2022. The summit dedicated to promoting foreign direct investment (FDI) and has directly impacted more than $57.9 billion in new U.S. investment projects, according to the organizers. , Bloomberg

(Bloomberg) -- A new US law that includes about $52 billion to boost domestic semiconductor production and research could unlock as much as $400 billion in investment, President Joe Biden’s commerce chief said.

“Our goal is to maximize it,” Commerce Secretary Gina Raimondo said on Wednesday in an interview on Bloomberg Television. “It is an amount that we hope is enough to unlock two, three, $400 billion on behalf of private industry.”

Biden on Tuesday signed into law a broad competition bill that includes the funds for the semiconductor industry, calling it a “once-in-a-generation investment in America itself.”

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.

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.

“The fact that we got that bill across the finish line has been a huge signal to industry that they ought to invest in America, and not in Asia or Europe,” Raimondo said.

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.