New Law Mandates Federal-State Cooperation to Attract Foreign Cash for U.S. Chip Manufacturing

If you’ve ever tried to buy a new car or a PlayStation 5 in the last few years, you know exactly what a semiconductor shortage feels like. It translates directly into higher prices and longer waits. The Securing Semiconductor Supply Chains Act is the government’s attempt to fix this issue by making sure more of those essential computer chips are made right here in the U.S.

This bill doesn't hand out new tax breaks or create a massive new agency. Instead, it’s a coordination effort. It directs the Department of Commerce’s SelectUSA program—which is basically the federal team dedicated to attracting foreign investment—to work directly with state-level economic development organizations. The goal? To figure out how to get more foreign direct investment (FDI) into U.S. facilities that make chips, package them, or supply the materials needed for their production (Sec. 4).

The Chip Shortage Problem: Why This Matters to Your Wallet

Congress is pretty clear in its findings: semiconductors are the backbone of the economy, and the recent supply chain chaos hurt millions of Americans and put jobs at risk (Sec. 3). Think of every electronic device you rely on—from your work laptop to the smart appliances in your kitchen—they all depend on a stable supply of these chips. When the supply chain gets shaky, everything gets more expensive and less reliable. This bill is about making that supply chain more resilient by bringing manufacturing capacity closer to home.

For someone working in manufacturing or trying to buy equipment for a small business, this could mean fewer delays and more predictable prices down the line. If a German or Japanese company decides to build a new chip fabrication plant in Ohio or Arizona because of this coordinated effort, that means high-paying local jobs and a more secure supply of components for industries like automotive and aerospace.

Mandating the Federal-State Huddle

The core of the bill requires SelectUSA to reach out to state economic development teams within 180 days of the law passing (Sec. 4). They have to ask the states three key questions: What roadblocks are stopping foreign money from coming in? What opportunities are the states seeing that the feds aren’t? And what resources do the states need to ramp up their investment attraction game? This is a smart move, recognizing that the states are the ones actually on the ground talking to potential investors.

After gathering this feedback, SelectUSA has two years to produce a comprehensive report for Congress. This report must detail their new strategies for attracting semiconductor FDI and, critically, explain how they will work with allies to ensure that foreign adversaries—as defined by existing law—don't benefit from these U.S. investment promotion efforts (Sec. 5). This is the national security layer, aiming to secure the supply chain without accidentally funding geopolitical rivals.

The Catch: No New Budget, Just More Work

Here’s the part that policy wonks and budget watchers will notice: This entire act must be carried out using existing funds (Sec. 6). There is no new money appropriated by Congress for this effort. This means the Executive Director of SelectUSA has to shuffle their current budget around to cover the costs of all this new coordination, reporting, and strategy development. While it's responsible budgeting, it puts a strain on the agency. They have to prioritize securing the chip supply chain over other important but potentially less urgent missions, simply by moving resources around within their existing operational budget.