As America Funds Domestic Chip-Making, Some Questions Remain

There's been "an enormous ramp-up in U.S. chip-making plans" over the last 18 months, reports the New York Times. For example: - In September Intel pledged $20 billion for two chip factories in Ohio- Micron expects to spend at least that amount on a new manufacturing site in Syracuse, New York.- Taiwan Semiconductor Manufacturing Company plans to invest $40 billion in Phoenix. "The boom has implications for global technological leadership and geopolitics, with the United States aiming to prevent China from becoming an advanced power in chips..."Across the U.S., more than 35 companies have pledged nearly $200 billion for manufacturing projects related to chips since the spring of 2020, according to the Semiconductor Industry Association, a trade group. The money is set to be spent in 16 states, including Texas, Arizona and New York on 23 new chip factories, the expansion of nine plants, and investments from companies supplying equipment and materials to the industry. The push is one facet of an industrial policy initiative by the Biden administration, which is dangling at least $76 billion in grants, tax credits and other subsidies to encourage domestic chip production.... The new U.S. production efforts may correct some of these imbalances, industry executives said - but only up to a point. The new chip factories would take years to build and might not be able to offer the industry's most advanced manufacturing technology when they begin operations. Companies could also delay or cancel the projects if they aren't awarded sufficient subsidies by the White House. And a severe shortage in skills may undercut the boom, as the complex factories need many more engineers than the number of students who are graduating from U.S. colleges and universities.... A $50 billion government investment is likely to prompt corporate spending that would take the U.S. share of global production to as much as 14 percent by 2030, according to a Boston Consulting Group study in 2020 that was commissioned by the Semiconductor Industry Association. "It really does put us in the game for the first time in decades," said John Neuffer, the association's president, who added that the estimate may be conservative because Congress approved $76 billion in subsidies in a piece of legislation known as the CHIPS Act. The article also cites predictions of 40,000 new jobs (made by the Semiconductor Industry Association) in exploring the possibility of a U.S. "talent shortage." "Intel, responding to the issue, plans to invest $100 million to spur training and research at universities, community colleges and other technical educators."

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