On October 2, 2024, President Joe Biden signed the Building Chips in America Act, which allows certain semiconductor projects to bypass lengthy environmental reviews by NEPA. This aims to boost U.S. semiconductor production, address critical delays and reduce reliance on foreign suppliers, while sparking concerns about environmental protections and public health.
On October 2, 2024, President Joe Biden signed the Building Chips in America Act, a key law aimed at boosting semiconductor production in the U.S. This legislation allows certain semiconductor projects to bypass the lengthy environmental reviews required by the National Environmental Policy Act (NEPA). By speeding up the approval process, the U.S. hopes to overcome delays in constructing essential chip manufacturing facilities that support important industries like artificial intelligence, electric vehicles and national defense. Currently, the U.S. produces only 10% of the world’s semiconductors, a significant drop from 37% in 1990. This decline highlights the urgent need for more domestic production to meet economic demands and ensure national security.
The Building Chips in America Act builds on the earlier CHIPS and Science Act, which has attracted substantial investments to the U.S. semiconductor industry. However, many projects have faced setbacks primarily due to the lengthy NEPA reviews, which assess the environmental impacts of federal projects. These reviews can take several years to complete, slowing down the development of new manufacturing plants. By allowing specific projects that start construction by the end of 2024 or receive less than 10% federal funding to skip NEPA, the government aims to simplify the process and reduce dependence on foreign suppliers, particularly Taiwan, which currently dominates the global semiconductor market.
Despite the potential advantages, critics express concern that avoiding NEPA reviews may weaken essential environmental protections. Semiconductor manufacturing is known for using harmful chemicals like PFAS, which can contaminate air and water, posing risks to public health. While supporters of this act argue that other environmental laws will still apply, critics worry about the long-term health effects on nearby communities. The Building Chips in America Act highlights the challenge of promoting industrial growth while ensuring environmental responsibility, an issue that is significant globally, including in India, as countries strive to enhance their technological capabilities. Finding a perfect balance between economic progress and environmental safety is crucial for the sustainable development of the semiconductor industry.
