The Biden administration is providing $162 million to Microchip Technology to support the domestic production of computer chips — the second funding announcement tied to a 2022 law designed to revive U.S. semiconductor manufacturing.
The incentives include $90 million to improve a plant in Colorado Springs, Colorado, and $72 million to expand a factory in Gresham, Oregon, the Commerce Department said. The investments would enable Microchip Technology to triple its domestic production and reduce its dependence on foreign factories.
Much of the money would fund the making of microcontrollers, which are used by the military as well as in autos, household appliances and medical devices. Government officials said they expected the investments to create 700 construction and manufacturing jobs over the next decade.
Fuck yeah. American jobs and reducing dependence is always good.
I’m sure some will still complain though.
You are getting none of these chips for free. They are giving public money to a corporation listed on the stock market.
This is the big issue. I get it. I get why it’s being done. At the same time holy shit am I tired of my money going to help the rich and kill people over seas, but we get told the poor don’t deserve Healthcare and we can’t afford to feed the kids in schools.
Yeah, I can’t wait till American chips are the chip version of the Russian Lada. Industrial policy has no negatives and totally doesn’t create dead end jobs. Never happened in the Soviet Union, or Japan, or countless other attempts at industrial policy in the past. Let’s not learn from our past mistakes. 'Muria, fuck yeah!
Genuine question/curiosity: I can see you’re being downvoted, and I can tell that your post is sarcastic. But I’m not informed enough on this area to know what the sarcastic take is. What happened with the Russian Lada? This isn’t a part of history I know.
It’s a pretty big logical leap. The Lada was a fully Russian made car, from the joint collaboration of the U.S.S.R.'s trade dept and Fiat. It’s got a history of being cheap, and was often made fun of by Americans, but was pretty well received by it’s target audience of the Eastern Bloc for being easy to repair. The company is still around, but these days their market niche is pretty well satisfied by Asian manufacturers like Hyundai and Kia, so you don’t really hear about them.
To take that story and go to “All state-funded manufacturing is bad and awful” is where it becomes insane.
deleted by creator
I responded to the post above. I hope you take a moment to read it.
But as to Huawei, they’re not a government controlled organization nor were they chosen to be the winner by the government as much as the US would try to claim otherwise. Instead the Chinese government shotgunned hundreds of billions of dollars to the entirety of the chip industry. And here’s the most important part, thousands of chip companies collapsed last year in China. Those that could compete in the free market survived, those that didn’t went under. Huawei was one that survived, but stands upon the corpses of thousands of companies.
Even with outcomes as positive as they have been for the whole of the Chinese chip market, there was incredible equity loss to accomplish this. That said, for China, better to have done this and lost hundreds of billions and catch up, than it was to languish against the US.
So, it’s in my opinion that 1. the 50 billion the US is putting into this is way too small and 2. it’s clear now that Biden is picking winners and losers. If you read my previous post you’ll understand why this is incredibly bad and concerning.
I’m glad you asked. The Soviet Union was famous for industrial policy. Or the government controlling what gets created and produced. It’s basically the reason why we say free markets are better and that we can’t use industrial policy to catch up.
The original Lada was famous for being the prime example of this. While western nations were driving highly advanced cars, the Lada was incredibly primitive. It didn’t have airbags, or anti-lock breaking or any safety features. Basically they were rolling death traps. Btw, Iranian cars are basically at this state and are also created with government control. The reason is, industrial policy doesn’t focus on what’s good for the market, but the demands of politicians. They saw the Lada could drive and that’s good enough and didn’t invest more into it since there were too many other demands. This happened to basically all soviet industries causing them to fall far far behind.
But the Lada is just an example. There are many other examples like the Russian Aerospace industry, or the Japanese Aerospace industry, or India’s chip fabs.
Now, that isn’t to say I disagreed with the chip act initially. China’s proven you can stimulate markets as long as you don’t get involved in the actual production. Basically China had a big chip fund and spread it across both large and small organizations, but most importantly allowing those who couldn’t compete to go bankrupt. That’s why there were so many reports about over 1,000 chip companies bankrupting in China last year. But it also produced Huawei’s new chip. You can’t pick winners and losers, you need to let the market decide. Which I thought initially what Biden would do. I also knew 50 billion wouldn’t be enough, but I thought it would be a start. Instead, we’re seeing Biden pick winners and losers. This will lead to bad outcomes.
Russian Lada was a “people’s car” that (like other Soviet products) was built for internal use and protected from competition. When the Soviet Union fell and Russian car manufacturers were exposed to competition, they eventually went out of business.
The story is not that simple though. The Lada was a really popular and robust car. It lived on for a long time and exported versions to Canada and other places using Western fuel-injected engines. I have no idea what happened to the company in the end but it seems clear at least to me that it was the sudden huge change in competitive landscape that did it in, not the industrial planning.
Škoda is a similar car brand from (at the time) Yugoslavia that managed to survive the fall of the Soviet Union and is still active as a brand today.
Still exist apparently https://en.m.wikipedia.org/wiki/Lada
This part:
the sudden huge change in competitive landscape that did it in
IS caused by industrial policy. That’s the whole point. They can’t keep up with competitive landscapes because the policy made it good enough then they just stopped and since it’s protected there’s no reason to improve.
Yes, the initial version was popular, but industrial policy preventing it from advancing was it’s death.
You literally explained how industrial policy killed it and then said it wasn’t industrial policy.
I will keep reposting my thoughts on what’s going on.
Xi told Biden that China plans to invade Taiwan. This is an act of diplomacy, giving the US a chance to prevent this from triggering WWIII.
China wants Taiwan for a myriad of reasons, not the least of which is TSMC, coupled with the AI embargo the US has levied on China. China must invade Taiwan if they want to be relevant in the tech sector 10 years from now.
Suddenly, Intel, who was once competitive with TSMC and now relies on them entirely, is telling us that “we will be beyond TSMC by 2024” really? No one’s buying it. Sounds like a publicity headline to satisfy military brass or some senators or something.
Now we’re investing directly in domestic chip manufacturing.
I’m surprised it’s not more cash tbh.
The US is trying to effectively move TSMC operations to US soil, in some form or another.
A war over Taiwan is likely going to destroy Taiwan’s domestic production. I would imagine this gets lumped in with things like steel production.
I was also surprised by the low number, and thought it might be a “first installment” with a sunk-loss mindset. I would expect a number with a B behind it. The future of the world’s economy, assuming it doesn’t all crash due to climate change, may be dependent on this investment.
Long INTC
yuuup
It does seem like removing reliance on Taiwanese fabs is the name of the game. Which is especially bad news for them.
“Hey, look! We’re giving millions of dollars of taxpayer money to a private for profit business! Pretty cool right? … It’s, uh, it’s gonna fight inflation.” - campaign argument of the stupid asshole administration I’m going to vote for later this year because the other guy wants to be a dictator
The article makes no mention of inflation besides pointing out what the chip shortages caused in the auto industry.
This is to reduce our dependence on foreign chip manufacturers to reduce the risk of it happening again when China invades Taiwan.
Damn you even said youd vote and you still got DVd… What do these mooks want, obsequious love?
I’m not an expert on this subject, but it seems the majority of the jobs would betemporary. They loop construction and manufacturing into a single number. Would be interested to see how many “permanent” jobs are being created with this money, and maybe even a ROI/break even time scale on those tax dollars.
I assume the vast majority of operations within any microchip factory will be robotic/automated. Meaning a large percentage of that 700 is likely on the construction side. Not poo pooing those per say, but makes it harder to see the full picture.
I think reducing dependency is a huge gain here and probably the more important point. We all saw what happened with the shortages.
Beyond that, I don’t know what the portion is that is construction. There might be a lot of oversight and QA positions. But even temporary jobs are good. If it takes a year to build, people are getting paid for a year.
Right, hence “not poo pooing those jobs” as they are certainly important, and construction jobs are always temporary (unless they’re apparently road construction ones :) )
It’s just always vague the net new in that area.
No doubt, getting more important manufacturing in country is a big win.
While there is a lot of automation on the factory floor, there is still a ton of support staff needed, particularly for maintenance of the hardware and infrastructure.
Super stoked at the possibility of actually being able to buy machines made in the USA instead of “figuratively thought about in California” like most electronics these days. Toyota cars have more percentage of a car being both designed and built in the US than an Apple iPhone, for example.
However, not really looking forward to the environmental impact in Colorado, Oregon and beyond. Most of Silicon Valley is all to this day toxic superfund sites from the damage caused by electronics manufacturing in the 1980s and 1990s. The groundwater is contaminated and there have been incidents like toxic gases leaking into new modern Google office buildings. Selfishly, preferring the US be free of those production contaminants, but holistically, that just moves (and until now has moved) the problem to Taiwan anyway.
Definitely happy to be proven wrong here, and that chip fab is less toxic than it once was, but also skeptical as the US is generally pretty “pro-business-before-citizen-health” and always has been. They’ll gladly plug their ears and go “la la la” to say “the economy is strong” before giving two shits about We The People. (See: radiation contamination, PFAS, and other superfund sites already present in states such as Colorado.)
I had wondered what companies? Why are they not listed?
It is a single company called Microchip Technology.
So, yeah.
