The senate passed the CHIPS-Plus (Creating Helpful Incentives to Produce Semiconductors for America) bill on Thursday (7/28/2022). With the expectation that this bill will be signed into law this week, what does this bill bring to the table and what does it mean for US listed semiconductors?

Aimed at subsidizing the US semiconductor industry, CHIPS-Plus includes around $54 billion in government subsidies for U.S. companies manufacturing computer chips. It also provides an investment tax credit that would cover 25% of investments in chip plants.

The latest report from the Semiconductor Industry Associated (SIA) highlights the surge in growth year-over-year relative to 2021.  As of April, it stood at 21.1% growth, amounting to $50.9 billion. This bill is designed to not only cement the U.S. as a manufacturing leader but assist in the growth of new technology within the semiconductor industry to help the U.S. compete globally.

A surge in new investment and subsidies could bolster this industry even further.

The MVIS® US Listed Semiconductor 25 Index (MVSMH) tracks the performance of the 25 largest and most liquid US exchange-listed companies in the semiconductor industry, where over 50% of their revenues stems from semiconductors or semiconductor equipment. The semiconductor industry could be seeing momentum with MVSMH jumping around 24.5% in the past month and jumping 5% Wednesday (7/27/2022) on the news of the Senate passing the CHIPS-Plus bill. 

MVIS® US listed Semiconductor 25 Index (MVSMH) 1 year Performance

Source: MarketVector IndexesTM. Data as of August 1, 2022.

 

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About the Author:

Alex Butler is a Business Development Associate at MarketVector Indexes GmbH. At MarketVector IndexesTM, Alex works closely with the business teams and clients to help tailor indexes and index data to meet client needs. Prior to joining MarketVector IndexesTM, Alex led the Americas Business Development team at S&P Global (Formerly IHS Markit, Markit) for ETF and Index Management. Alex is a product expert for ETF and index data. Alex studied at Elon University with a BA in Economics along with a focus on Information Science.

 

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