Semiconductor employment is down since the CHIPs Act passed and neoliberal corporate welfare policies, like subsidies and tax incentives, won't bail out lagging companies.
How do you think the US should deal with the problem of having most of the world’s chip made in Taiwan, a country at considerable risk of future supply disruptions? Taiwan itself achieved that position with considerable long-term government investment. Perhaps the Chips Act isn’t yet achieving all of the desired results. But of course all of the funds haven’t been spent yet and the problem is challenging. I’ve heard though that the TSMC Arizona facility is producing Chips well. Maybe Intel is just too far behind technology wise. But the ultimate goal here is primarily strategic - to make sure the US is not without the capacity to produce something it absolutely needs in the future. Not sure your Ohio-focused analysis can be used to deem that goal a failure yet.
Thanks for your comment and sorry for the delay in replying over the holiday!
You’re very right that it is a strategic issue. However, if the aim is to let the “free market” resolve the issue, trying to nudge it with inefficient government intervention won’t be enough. For instance, trying to now spur Intel to catch up technologically with foreign companies which they can only afford to do with generous corporate welfare from the U.S. Additionally, site selection would normally depend on productivity factors (co-located supply chains, port access, an already trained workforce in the industry). These factors would likely have led Intel to choose somewhere else than Ohio absent government intervention. So now, we want to up our chip production and we’ve incentivized the company to locate in a place where production is less efficient because the government has distorted the incentives.
If the goal is simply to get foreign companies to build capacity here, there is maybe an argument the CHIPs Act will work a little bit, but inefficiently and at a high cost to U.S. taxpayers and to the benefit of foreign-owned corporations. Additionally, if over 80% of the critical metals and minerals are still reliant on Chinese mines, there’s only so much strategy benefit to be gained by locating final production here.
What I would rather see is a WW2-era full public effort to produce chips in the U.S. start to finish. If we are throwing billions to inefficiently prop up a U.S. owned private company whose technology lags or throwing money at foreign investors… why not truly invest in a publicly owned, secure supply chain of semiconductor production.
That’s likely far too radical for many, but also why we are likely still stuck in the neoliberal paradigm of the government inefficiently hemorrhaging money to private entities to try to gently massage solutions to problems that actually require a hammer.
How do you think the US should deal with the problem of having most of the world’s chip made in Taiwan, a country at considerable risk of future supply disruptions? Taiwan itself achieved that position with considerable long-term government investment. Perhaps the Chips Act isn’t yet achieving all of the desired results. But of course all of the funds haven’t been spent yet and the problem is challenging. I’ve heard though that the TSMC Arizona facility is producing Chips well. Maybe Intel is just too far behind technology wise. But the ultimate goal here is primarily strategic - to make sure the US is not without the capacity to produce something it absolutely needs in the future. Not sure your Ohio-focused analysis can be used to deem that goal a failure yet.
Thanks for your comment and sorry for the delay in replying over the holiday!
You’re very right that it is a strategic issue. However, if the aim is to let the “free market” resolve the issue, trying to nudge it with inefficient government intervention won’t be enough. For instance, trying to now spur Intel to catch up technologically with foreign companies which they can only afford to do with generous corporate welfare from the U.S. Additionally, site selection would normally depend on productivity factors (co-located supply chains, port access, an already trained workforce in the industry). These factors would likely have led Intel to choose somewhere else than Ohio absent government intervention. So now, we want to up our chip production and we’ve incentivized the company to locate in a place where production is less efficient because the government has distorted the incentives.
If the goal is simply to get foreign companies to build capacity here, there is maybe an argument the CHIPs Act will work a little bit, but inefficiently and at a high cost to U.S. taxpayers and to the benefit of foreign-owned corporations. Additionally, if over 80% of the critical metals and minerals are still reliant on Chinese mines, there’s only so much strategy benefit to be gained by locating final production here.
What I would rather see is a WW2-era full public effort to produce chips in the U.S. start to finish. If we are throwing billions to inefficiently prop up a U.S. owned private company whose technology lags or throwing money at foreign investors… why not truly invest in a publicly owned, secure supply chain of semiconductor production.
That’s likely far too radical for many, but also why we are likely still stuck in the neoliberal paradigm of the government inefficiently hemorrhaging money to private entities to try to gently massage solutions to problems that actually require a hammer.