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Biden’s semiconductor push has states competing for billions of dollars in federal funds, hoping for the next manufacturing boom.

WASHINGTON (AP) — The global race to develop next-generation computer chips has reached Nebraska, as well as dozens of other states.

As part of the CHIPS and Science Act, which was signed into law last year, the government intends to begin allocating more than $50 billion for semiconductor manufacturing and research in the coming months. The prospect of that much money has prompted states to compete to position themselves as the best place to kickstart a semiconductor boom.

The CHIPS legislation was intended to help strengthen America’s supply chain in the production of computer chips used in everything from coffee makers to automobiles to pacemakers and missiles. While the legislation was designed to address national economic and security concerns about a lack of domestic manufacturing, it also presents a golden opportunity for state and local governments.

According to data from the Semiconductor Industry Association and interviews with industry leaders and officials, more than a dozen states have begun putting together incentive packages that include tax credits, zoning changes, and regulatory red tape cuts to entice the limited number of companies looking to expand their chip production in the United States.

“We haven’t had this kind of economic potential since corn,” said Nebraska state Sen. Mike McDonnell, who has proposed legislation to make it easier for chip companies to expand in his state. “It’s a big idea, and it has the potential to change the state of Nebraska.”

For years, national security experts and corporate executives have urged the United States to do more to boost domestic chip manufacturing, despite the fact that Taiwan produces 92% of the world’s most advanced chips.

During the pandemic, however, Covid shutdowns and supply chain disruptions caused a worldwide shortage of chips, resulting in shortages of appliances, cars, and manufacturing equipment. Increased tensions between the United States and China, as well as concerns that China may be moving toward annexing Taiwan, have all contributed to the urgency.

In anticipation of the federal funds, semiconductor companies have already committed billions of dollars. According to the Semiconductor Industry Association, since the bill was introduced in the spring of 2020, companies have announced plans for $187 billion in new or expanded semiconductor facilities in 16 states, creating more than 30,000 jobs.

“I don’t think it’s hyperbole to say it’s unprecedented and historic,” Dan Berglund, executive director of the State Science and Technology Institute, said of the infusion of federal and state funds to expand manufacturing. “Between the CHIPS Act and some of the other bills passed by Congress in the previous session, it really has the potential to completely restructure or reshape the face of American manufacturing.”

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