The Biden administration has pledged to provide up to $6.6 billion so that a Taiwanese semiconductor giant can expand the facilities it is already building in Arizona and better ensure that the most-advanced microchips are produced domestically for the first time.
We’re giving billions for corporations to move manufacturing back here…
When all we had to do was pass a law that defense chips had to be produced in America and they’d have been fighting each other for places to build.
We don’t need to subsidize one of the most profitable parts of one of the most profitable industries in our country.
If the only way they could sell to the DOD was to produce here, they would. And that would lead to civilian chips once the infrastructure and workers were here.
If it was for manufacturing something mundane like lightbulbs, I would agree with you.
But at this point, leading edge semiconductor production is highly limited, specialized, and is being sought after by nearly everyone - and they’re willing to pay top dollar to secure supply.
You can’t really play hardball with someone if they move their entire production and supply output to a political rival, no matter how good your local profit margins may be.
That being said, this is absolutely a mess of our own making from offshoring everything for profit - 6bn is pocket change for the US though, so decades of profit and a manufacturing blitz isn’t really all that bad (aside from carving out the middle class, but that’s another story).
Neither TSMC nor Samsung ever produced chips in North America in the first place. And TSMC sells their entire production capacity (minus whatever they use for development), so I’m not sure how big of a draw the military production would be, especially considering there isn’t a pool of people who are ready and educated for chip production work just sitting around waiting for a job offer. Plus there’s a cultural difference in work/school ethics; people in North America aren’t as willing to dedicate their lives to work.
Thank god for that.
I’m not sure what you mean by ever? Samsung’s been making chips in Austin for almost 30 years.
Fair enough, my main point was that any chip fabrication capability added to North America isn’t moving it “back” here like it would be for many other industries.
Ohh I misunderstood your other post.
I agree with your main point. I don’t think international manufacturers would find value in spinning up new fabs here just to make chips for the DoD. But it does make me curious how big of a chunk defense is vs total. I would guess it’s pretty small. Chips are in everything, it’s not like these aerospace guys where DoD is their cash cow.
Ultimately, whatever the case, it’ll take time to transition and if things with China heat up, we could see a situation where they destroy much of the chip fabrication for the west and Intel and global foundries have a lot of their capacity reserved for military uses. I mean, we’ll have bigger things to worry about than consumer chip shortages, but I’m wondering if it’s a good idea to keep some backups handy because if a part fails, it might be a while before it can be replaced at great expense.
The US should really have added offshoring tariffs to balance the savings for moving anything offshore, especially since those savings go right to the very top while simultaneously screwing over the remnants of the middle class.
Are those actually using leeding edge chips? Unless you are also including data centers in here, I think most military tech probably uses mature nodes.
The NSA might need the latest chips to have as much performance for processing data as possible, and you probably also need huge data centers for the development of stuff. But you don’t need 3nm chips to put them in cruise missiles or even aircrafts.
DoD buys a shitload of PCs and clustered servers and things too.
Which is a separate topic from whether are all state-of-the-art (spoiler: the vast majority are not, I doubt much has changed in that regard since I’ve been out).
Why would “all” be the topic
I do think we should heavily penalize companies that manufacture outside of the US. We should be exporting our products and cashing in. Everyone in this country should be rolling in dough.
Then they make it here too only in a smaller scale and charge 20 times as much. Then when nobody buys it because it’s too expensive, they say “see, we told you we couldn’t do it” and then everyone wants it made it china again so we can have it.
Or they don’t, and we make up that money selling to other countries.
That’s not how it works though. It’ll cost too much to make and export. Someone else will make it in China and undercut the US version and that factory will go under. It’s not as simple as saying you need to make it here in the US.
Got any solutions or just complaints?
The current plan seems to be a good call. If you’re struggling with it because of Biden, just pretend it was trumps idea.
Not everyone who disagrees with you likes Trump.
You’re right, that’s why I said IF.
you can’t just decide to build cutting edge chips
if the DoD needed cutting edge chips but had to purchase them from within the US, all that would happen is their technology would be worse for the next decade(s) until US production could catch up
given the current us procurement strategy of keeping at least a generation or so ahead of its next near-peer, i really doubt that would fly