On October 1, 2024, President Biden is set to sign a controversial bill that will weaken federal environmental reviews for semiconductor manufacturing projects that receive subsidies from the 2022 CHIPS and Science Act. This legislation, which passed the House last week and received unanimous approval in the Senate in December 2023, aims to expedite construction timelines for chip manufacturing facilities, a move proponents argue will bolster the U.S. economy and enhance national security [44fc72ba].
The new law allows projects to bypass National Environmental Policy Act (NEPA) reviews if construction begins by the end of the year or if federal assistance constitutes less than 10% of total project costs. This exemption has raised concerns among critics, including Representative Zoe Lofgren, who argue that it undermines transparency and could lead to significant environmental impacts [44fc72ba].
This legislative action comes in the wake of the Biden administration's announcement of over $30 billion in grants for semiconductor companies, part of a broader strategy to reclaim a larger share of the global semiconductor market. Currently, only 10% of the world's semiconductors are produced in the U.S., a steep decline from 37% in 1990 [44fc72ba]. Commerce Secretary Gina Raimondo has emphasized the bill's critical role in enhancing national security by ensuring a robust domestic semiconductor supply chain [44fc72ba].
Earlier developments included the Biden administration finalizing a US$123 million grant to Polar Semiconductor on September 24, 2024, marking the first binding award under the Chips and Science Act. This funding is intended to double Polar's manufacturing capacity in the U.S. within two years [9d9e71f2]. The grant will be disbursed as Polar meets specific benchmarks, although details on these milestones remain undisclosed [9d9e71f2].
In conjunction with these funding efforts, the Semiconductor Industry Association (SIA) has been advocating for the Building Chips in America Act (S. 2228), which aims to streamline semiconductor manufacturing projects. This bipartisan bill seeks to expedite environmental reviews under NEPA while maintaining essential protections [df9a0fb9].
As the semiconductor industry evolves, the balance between environmental considerations and the urgent need for increased production capacity remains a contentious issue among lawmakers and industry leaders. The recent legislative changes reflect a growing urgency to enhance U.S. semiconductor manufacturing capabilities while navigating the complexities of environmental impact assessments [44fc72ba][df9a0fb9].