US President Joe Biden has signed a law to commit $280 billion towards high-tech manufacturing and scientific research, in order to compete with China.
This is due to growing concerns over a global shortage of microchips, which are key components to everything from cars to mobile phones.
The US currently produces around 10% of the world's semiconductors, down from 40% in 1990.
Mr. Biden called it a "once in a generation" investment, citing Micron's plans to invest $40 billion on memory chip manufacturing, which is estimated to generate 40,000 jobs.
The investments include tax breaks for businesses that build computer chip manufacturing plants in the US.
The bill will also allocate around $200 billion to scientific research and boost funding for industries like robotics and wireless communications.
This spring, the European Union announced that it will spend almost €40 billion to increase the production of computer chips.
