US Innovation and Competition Act

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    Recently, the US Senate has approved a bill titled the US Innovation and Competition Act (USICA).

    About the Bill

    • Aim: The bill aims to boost US semiconductor production and the development of Artificial Intelligence (AI) and other technology.
    • Background
      • It builds off a previous proposal called the Endless Frontier Act, which was lauded as one of the first big bipartisan bills to come from the Biden administration. 
        • It was originally intended to provide USD 100 billion in funding for a new science directorate at the National Science Foundation to promote research in emerging tech fields.
        • It would support and finance new tech hubs and encourage tech companies to find homes outside of Silicon Valley.
    • Reasons for USA’s Decline
      • For years, the US has been a leader in the development of new chip products like GPUs and microprocessors, however, from a chip manufacturing standpoint, the US is losing ground in two critical areas.
        • Intel and US foundries are lagging in process technology against their Asian rivals in TSMC and Samsung. China is also closing the gap. 
        • The US has seen a sharp decline in new fabs and capacity.

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    • Funding and Features
      • USD 50 billion emergency allotment to the Commerce Department to stand up semiconductor development and manufacturing through research and incentive programmes.
      • A 30 per cent boost in funding for the National Science Foundation.
      • USD 29 billion for a new science directorate to focus on applied sciences and an additional USD 52 billion for its programmes.
      • USD 10 billion to reshape cities and regions across the US into technology hubs.
      • Overall cost would increase spending by about USD 250 billion with most of the spending occurring in the first five years.
      • The funds will go to the Commerce Department and cities will be able to pitch the government on why it should be on the receiving end of these funds.
    • Significance
      • It will lead to increased focus on research and development into cutting-edge industries and creating new, well-paying tech jobs outside of the coasts.
      • It has been described as the biggest investment in scientific research that the US has seen in decades.
        • It comes as the US’s share of semiconductor manufacturing globally has steadily eroded from 37 per cent in 1990 to about 12 per cent now.
        • Also, a chip shortage has exposed vulnerabilities in the US supply chain.
      • It will also bring the US face-to-face with China in growing international competition in the sector. It becomes even more significant as whoever wins the race to the technologies of the future is going to be the global economic leader with profound consequences for foreign policy and national security.
      • It marks the next step in achieving parts of the US administration’s infrastructure goals.
        • In March 2021, the US President rolled out the American Jobs Plan
        • The original USD 2 trillion plan contained funding for broadband expansion, roads, highways, and called for USD 50 billion for domestic semiconductor manufacturing.
    Semiconductors

    • Semiconductor is any of a class of crystalline solids intermediate in electrical conductivity between a conductor and an insulator.
    • Semiconductor Materials
      • Solid-state materials are commonly grouped into three classes: insulators, semiconductors, and conductors. (At low temperatures some conductors, semiconductors and insulators may become superconductors).

    (Image Courtesy: Britannica)

    • Applications
      • They are employed in the manufacture of various kinds of electronic devices, including diodes, transistors, and integrated circuits.
      • Such devices have found wide application because of their compactness, reliability, power efficiency and low cost.
      • As discrete components, they have found use in power devices, optical sensors, and light emitters, including solid-state lasers.
    • Features
      • They have a wide range of current- and voltage-handling capabilities and, more importantly, lend themselves to integration into complex but readily manufacturable microelectronic circuits.
    • Significance
      • They are, and will be in the foreseeable future, the key elements for the majority of electronic systems, serving communications, signal processing, computing, and control applications in both the consumer and industrial markets.
    • Global Semiconductor Market
      • According to a report, the global semiconductor market size is expected to grow by USD 90.80 billion during 2020-2024, progressing at a Compound Annual Growth Rate (CAGR) of over 4 per cent during the forecast period.
      • About 76 per cent of market growth is expected to come from Asia-Pacific during the forecast period.
        • China, South Korea, Taiwan and Singapore are the key markets for semiconductors in the Asia-Pacific.

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    Artificial Intelligence

    • It refers to the ability of machines to perform cognitive tasks like thinking, perceiving, learning, problem solving and decision making.
      • Simply, it makes a computer, a computer-controlled robot, or software performing human-like tasks.
    • The term was coined in 1956 by John McCarthy.
    • There are two subsets under AI
      • Machine Learning: It involves the use of algorithms to parse data and learn from it. This enables making a determination or prediction.
      • Deep Learning: It is a technique for implementing machine learning.

    (Image Courtesy: AQ)

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    Source: TH