TL;DR: Protect Your Ass & National Assets. This thread is for all things industrial sector, integrated circuits and their intersection with geopolitics. The title is in reference to a bill that was introduced in the 116th U.S. Congress (2019-2020), also known as the
Creating Helpful Incentives to Produce Semiconductors (CHIPS) For America Act. A bipartisan, bicameral piece of legislation aimed to establish incentives and investments that support U.S. semiconductor research and development, manufacturing and supply chain security. They're as incompetent and late as they've ever been. Why do these tech components matter so damn much? You don't have to take my word for it.
In 1945, the U.S. manufacturing sector accounted for over 40% of the entire American workforce; by 2020, that had dwindled down to less than 10%. Despite the heavy losses, elimination and offshoring of factory work in consumer goods and light manufacturing, the US has never lost heavy industry or the production of capital goods. In fact, the sector as whole has only continued to expand in terms of real output and is still responsible for driving 35% of productivity growth, 60% of exports, and 70% of private sector R&D. Every dollar spent in manufacturing contributes $1.89 in growth for industries such business services, retailing and transportation. Along with surplus natural resources, a skilled labor force and penchant for entreprenuership, capital goods are one of the backbones of America's advanced economy.
As we know, integrated circuits are the brains of modern electronics and fundamental to enabling advances in computing, communications, defense, energy, health care, medical devices and transportation, in addition to next generation artificial intelligence, quantum computing and wireless networks. The US spawned this industry into existence following World War II and heading into the 2020s, maintains a roughly 50% global market share. It directly employs over 250,000+ Americans and supports an additional one million US jobs, is one of the country's top three global net exports (aircraft and refined oil) and America's number one contributor to labor productivity growth. None of this should be taken for granted.
In a country that values profit over patriotism, it's great to have multinationals who decide to plant their own corporate flag firmly on U.S. soil. The American semiconductor industry doesn't base a majority of its production in the United States necessarily out of loyalty, but more pragmatic reasons of IP protection and legit concern over industrial espionage (they do not base production in the People's Republic of China). The result and benefit to the country is the same, and for what it's worth they're also far from being the most egregious beneficiaries of government subsidies and tax breaks. In fact, they probably deserve more of them if remaining on the cutting edge of technology is a national priority. It's doubly beneficial when companies based in nations of geopolitical allies make foreign direct capital investments in American manufacturing and stateside job creation.
Of course, there's other well known global players wanting into this high technology game but as they've found out the hard way over decades in embarrassing failed efforts, the know-how to both engineer and manufacture semiconductors at the scale of being competitive in the global market truly is that complex and difficult. The barrier to entry really is that high. Smug
@NoDak was right, other Sherdoggers were wrong and he forgives them. It's made all the more seemingly impossible when the kingpin progenitor constantly slams the door on the foreign acquisition of tech assets and implements export controls to choke off access to the materials, machinery, equipment, software and services required to raise their own domestic industry. It's an overtly hostile tool of economic warfare, and the result of being full fledged blacklisted is invariably an inevitable collapse of that corporation.
As far as the aforementioned "CHIPS For America Act", it's an obvious no-brainer for automatic acceptance and chump change given the spending of the federal government these days. It probably doesn't go far enough in some respects given how capital intensive and difficult it is to set up a modern semiconductor fabrication manufacturing plant: An investment tax credit of 40% for semiconductor equipment or facility costs through 2024; $12 billion towards R&D in a variety of subindustries, related fields, and training programs; $10 billion in federal matching to local and state funding in support of advanced manufacturing; $750 million in support of transparency, policy negotiations with foreign powers, and consistency in the semiconductor industry; new programs to boost the nationwide STEM workforce, 5G leadership, and advanced assembly; DoD funding for related projects including the Defense Production Act tie-ins to support rapid production as needed.
Global Industry Snapshot.
SMIC?