The Semiconductor Wars, Part II

I will not offer very much commentary on this Bloomberg column, republished by the Washington Post. The reason is simple. Long time readers of this blog have heard all about the problems America is facing in ramping up its ability to manufacture semiconductors. Link here. Obviously, I have no expertise in this area, but I seem to have chosen good sources. So, I offer myself a deserved pat on the back, for keeping you informed.

I report on such matters because I believe that much of what passes for information in the media is simply lies-- and cheerleading.

I am not going to cross post this on my new Substack. Because it does not have much of anything to do with therapy and its culture. Still, feel free to sign up to the Substack. It is well worth your attention.

In any event, those who are beaming with optimism about America’s ability to translate a new law into more semiconductors are whistling past the graveyard.

Here are some excerpts from the article:

By now it’s clear that the Chips and Science Act — which includes a $52 billion splurge for the semiconductor industry — is unlikely to work as intended. In fact, its looming failure is a microcosm of all that’s wrong with America’s current approach to building things.

Hmmm-- a looming failure?

Why should this be so?

Producing chips in the US still takes 25% longer and costs nearly 50% more than doing so in Asia. 

The founder of Taiwan Semiconductor happened to warn Nancy Pelosi of just this problem.

Why does it cost so much to manufacture in America? The answer is-- politics.

From 1990 to 2020, the time required to construct new chip plants (called fabs) in the US soared by 38%. Clean Air Act permits can take 18 months. National Environmental Policy Act reviews take an average of four and a half years. A half dozen other federal laws may come into play, plus endless state and local variants. At every step, myriad agencies must be consulted and parochial interests must be heard. Yet technology does not stand still for these bureaucratic tea parties; such delays only add expenses, discourage private investment, and prevent US manufacturers from seriously competing with overseas rivals.

And also:

Companies hoping for significant Chips Act funding must comply with an array of new government rules and pointed suggestions, meant to advantage labor unions, favored demographics, “empowered community partners” and the like. They should also be prepared to offer “community investment,” employee “wraparound services,” access to “affordable, accessible, reliable and high-quality child care,” and much else. One can debate the merits of any of these objectives. But larding already-uncompetitive businesses with crippling new costs to advance completely unrelated social goals is simply at odds with the stated purpose of this law.

The other problem is quite simply that the American educational system, what with its obsession with social justice and equity, has failed to produce the talent needed to take jobs in the new factories:

One study found that 300,000 more skilled laborers may be needed just to complete US fab projects underway, let alone new ones. Yet the number of US students pursuing advanced degrees in the field has been stagnant for 30 years. Plenty of international students are enrolled in relevant programs at US schools, but current policy makes it needlessly difficult for them to stay and work. The strains are showing: New plants planned by Intel Corp. and Taiwan Semiconductor Manufacturing Co. are both struggling to find qualified workers.

Now, Bloomberg offers some suggestions for how American companies can get around the problems that the Biden administration has built into the law.

Issue “fast track” exemptions for chipmakers under federal environmental law — or, better yet, amend the law to accelerate all such projects and inhibit frivolous lawsuits. Increase visas for skilled workers, prioritize applicants with needed STEM abilities, and exempt foreign graduates with advanced science degrees from the cap on green-card allotments. Slash the costly and counterproductive strings attached to Chips Act funding and accept that the proper venue for enacting the progressive agenda is Congress, not random companies.

One notices that in the matter of finding workers who are capable of doing the work, even Bloomberg, in an optimistic moment, sees no other way than immigrant visas.