The cost of building a chip factory is as high as $15 billion, and most of the expenditure is on expensive tools. As a result, the proposal will provide a 40% refundable income tax credit for semiconductor devices, and the aid funds include $10 billion in federal funds for government incentives to build factories, and $12 billion in research and development funds.
Once passed, the bill will empower the U.S. Department of defense to use funds to build and enhance domestic semiconductor production capacity in accordance with the defense production act. While there is a network of trusted foundry in the United States to help provide chips to the US government, many chips still have to be purchased from Asia.
In response, Dan Hutcheson believes that the US governments proposed $22.8 billion in financial support is less than half of the amount needed, and that $50 billion is more likely to achieve the desired results.