President Biden signs legislation to exempt some semicon factories from environmental regulations

President Joe Biden has signed a new legislation that exempts certain US semiconductor manufacturing facilities, receiving government subsidies, from additional federal environmental reviews.

This move is intended to accelerate projects funded by the $52.7 billion CHIPS Act of 2022, which is designed to bolster domestic semiconductor production and reduce reliance on foreign suppliers.

Streamlining the process
Without the new law, these semiconductor projects could have faced extended delays due to the need for federal environmental reviews under the National Environmental Policy Act of 1969.

Proponents of the bill argue that the projects already comply with federal, state, and local environmental regulations, and subjecting them to further reviews would result in unnecessary hold-ups. These delays could have potentially slowed down or even stopped projects that are already underway, according to the Semiconductor Industry Association.

The US Commerce Department has allocated more than $35 billion across 26 semiconductor manufacturing projects.

Some of the significant beneficiaries include South Korea’s Samsung, which is set to receive $6.4 billion to expand production in Texas, Intel, which will receive $8.5 billion, Taiwan’s TSMC with $6.6 billion for US expansion, and Micron Technology with $6.1 billion for domestic factories.

Balancing growth and environmental concerns
While the legislation is aimed at boosting semiconductor production and creating thousands of new jobs, it has been met with criticism from environmental groups.

Organisations like the Sierra Club argue that the environmental reviews are crucial to protect communities and workers from the potential hazards associated with semiconductor production, such as hazardous contaminants.

Critics like US Representative Zoe Lofgren of California expressed concern over the bill’s potential environmental impact, highlighting the legacy of pollution from past semiconductor manufacturing sites. She stressed that the National Environmental Policy Act (NEPA) reviews play a vital role in preventing future contamination, urging that lessons should be learned from previous incidents.

A bipartisan push for economic growth
The legislation was co-authored by Democratic Senator Mark Kelly and Republican Senator Ted Cruz, emphasising its bipartisan support. Kelly stated that the bill would help prevent unnecessary delays in microchip manufacturing, boosting efforts to bring semiconductor production back to the US and strengthen supply chains.

Cruz added that streamlining the permit process is a crucial step in reducing the country’s reliance on China for semiconductors, which are critical to national defence.

Although the White House acknowledged concerns, it assured that semiconductor projects would still be held to federal requirements for clean air, water, and endangered species protections. However, with this new law, semiconductor manufacturers can avoid years of potential delays while still adhering to essential environmental safeguards.