One lesson learned from the COVID-19 pandemic is that decades of outsourcing and globalization has left the U.S. dependent on foreign manufacturing. Amid growing political tensions in 2022, the government allotted hundreds of billions of dollars to reduce the dependency on foreign manufacturing.
Congress passed two bills last year that provide funding for the deglobalization of innovative American technologies.
CHIPS and Science Act of 2022 – the reshoring of American manufacturing. Semiconductors, also known as chips, control the movement of electric current in an electronic device. They help run our smartphones, computers, refrigerators and microwaves, as well as our vehicles, solar panels and military defense systems. The U.S. leads the world in the research and development of semiconductors; however, 75% of the world’s chips are manufactured in East Asia, with Taiwan being the standout.
The shortage of semiconductors from supply chain disruptions during COVID forced the U.S. to take action and bring chip fabrication back. This act, which stands for Creating Helpful Incentives to Produce Semiconductors, directs $280 billion toward enhancing U.S. semiconductor operations, provides investments to regional innovation hubs and promotes workforce development in STEM fields.
You can read the full article by Senior Portfolio Manager, Director of ESG Strategies Andy Drennen in the Kansas City Star. Shared with permission from the Kansas City Star.
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The views and opinions expressed in this article are those of Andy Drennen and are not endorsed by, and do not necessarily reflect the views of, Simmons Bank. Simmons Bank does not provide tax, accounting, or legal advice.