Chip Wars heat up as Biden subsidies poised to make impact

But the tide is turning. The Biden administration this morning announced it would direct $5 billion in CHIPS Act money toward a new training facility to boost workforce participation in a semiconductor industry dominated by foreign talent. That’s an indicator of much more to come: After a lengthy review period, the government will start giving out billions more over the coming months, primarily in the form of grants to domestic chip manufacturers such as Intel.

In any case, experts say, it’s too early to ring the alarm bells on what was always designed to be a long-term policy.

“It’s like complaining [during] the eighth month of a pregnancy that nothing has appeared yet,” said Georgetown global innovation policy professor Charles Wessner in an interview with Fortune. Wessner, a senior advisor at the Center for Strategic and International Studies, called the CHIPS Act “an unprecedented program, both in its focus and its scale … I would venture that they’ve actually made great progress.”

The act aims to reverse a three-decade decline in American semiconductor manufacturing: The United States produced just 12% of the world’s chips in 2020, down from 37% in 1990. East Asian manufacturers such as Taiwan’s TSMC and South Korea’s Samsung have emerged as leaders, with a near-complete duopoly on the advanced microprocessors that power high-consumption tech like virtual reality and artificial intelligence.

The CHIPS Act is the Biden administration’s effort to turn the tide. It committed $53 billion toward subsidizing labor force development, semiconductor R&D, and building chip factories back in August 2022. But as of last month,…