President Joe Biden has committed the U.S. to manufacturing American products on American soil. As the COVID pandemic showed us, relying upon other countries for important products, such as masks, prescriptions, and semiconductor chips is a losing battle.
Per the president’s plan, America will build two or more semiconductor manufacturing clusters by 2030. They will be financed by Biden’s three billion dollar CHIPS Act, according to The Wall Street Journal (WSJ).
Commerce Secretary Gina Raimondo noted that President Biden wanted to build centralized ecosystems:
‘[Ecosystems tying] plants, research-and-development labs, final packaging facilities for assembly of chips and the suppliers needed to support each phase of the operation.’
Raimondo is spearheading the return of chip manufacturing. In 1986, the AT&T semiconductor manufacturing plant in Lee’s Summit, Missouri was in its last stage of wind down. At the time, President Ronald Reagan introduced America to the fatal trickle-down economy and exporting union jobs. Exports included chip manufacturing. Each was a big win for Republicans.
China, South Korea, Japan, and Taiwan imported semiconductor manufacturing. But President Biden’s CHIPS Act plans to spend $39 billion on grants, according to The New York Times:
‘The CHIPS Act aims to rectify some of these shortcomings by allocating $39 billion in grants for new or expanded U.S. factories. The Commerce Department has indicated that about two-thirds of the money will be steered toward makers of leading-edge semiconductors, a category that includes TSMC, Samsung, and Intel. All three companies have already broken ground on major expansions of their U.S. facilities’
Intel’s Vice President of U.S. Government Relations Allen Thompson said:
‘Our I.P. is here, and that’s not insignificant. We are the U.S. champion.’
A spokesman for AMD commented:
‘We fully support the CHIPS and Science Act and the efforts of the Biden administration to boost domestic semiconductor research and manufacturing.’
Management Professor at Harvard Business School Willy Shih keeps semiconductor issues in sight and added:
‘Everybody wants their piece of the pie. We haven’t done something of this scale in the U.S. in a long time. There is a lot at stake.’
The Secretary of Commerce said:
‘We have very clear national security goals, which we must achieve. I suspect there will be many disappointed companies who feel that they should have a certain amount of money, and the reality is the return on our investment here is the achievement of our national security goal. Period.’
AMD pointed to the potential problem of organizations receiving grants.He feared the companies might hang onto the grant money rather than retrofitting their factories;
‘Any facility receiving federal assistance must be operational upon completion of construction. A facility that sits idle or is held in reserve for demand increases should immediately forfeit any federal funds.’
We will follow this great economic experiment here. Watch this space.
Gloria Christie is a political journalist for the liberal online newspaper The Bipartisan Report. Find her here on Facebook. Or at Three White Lions, her book written in her own unique style with a twist of humor on Amazon Kindle Vella and the Gloria Christie Three White Lions podcast on Apple, Spotify, Amazon Music, etc. Christie’s Mueller Report Adventures In Bite-Sizes a real-life compelling spy mystery (in progress).