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Senate passes bipartisan bill to subsidize U.S.-made semiconductor chips

washingtonpost.com

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Re: Senate passes bipartisan bill to subsidize U.S.-made semiconductor chips

#71

Post by Ajedi32 »

Cuuugi wrote: post #32
lettergram wrote: post #26

I disagree that subsidizing R&D to a few companies is going to make us more competitive. Look at GE or Boeing, it didn’t work out. What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form. It costs $0 tax dollars and brings in revenue and high paying jobs. Similar to what we did with car manufacturing.

"What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form." Is the market really free with tariffs?

Obviously it's less free with tariffs than it would be without, but given the goals of the bill some level of interference is unavoidable. The question is whether to meet those goals with top-down central planning, or by tweaking the incentives and letting the market handle the details on its own. The latter is much more in keeping with free market principles than the former.

Re: Senate passes bipartisan bill to subsidize U.S.-made semiconductor chips

#72

Post by oofbey »

lettergram wrote: post #26

I disagree that subsidizing R&D to a few companies is going to make us more competitive. Look at GE or Boeing, it didn’t work out. What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form. It costs $0 tax dollars and brings in revenue and high paying jobs. Similar to what we did with car manufacturing.

Undoubtedly this is a massive gift from taxpayers to Intel. Hard to see anything good in that.

I also agree that subsidizing R&D isn't a reliable strategy to make us more competitive. Government incentivizes to find solutions works much better.

BUT building high-end fabs is SO very capital intensive, that I think this actually could work out. This might actually be a case where the skids need to be greased a bit (to the tune of billions of dollars) to get them over the hump and back in the game.

Re: Senate passes bipartisan bill to subsidize U.S.-made semiconductor chips

#73

Post by 2OEH8eoCRo0 »

skywal_l wrote: post #30
qaq wrote: post #19

Earlier quoted context omitted.

What would be a good way?

Have the DOD force its suppliers to make their things in the US? Only allow them to import raw materials or low value manufactured elements. Just throwing ideas, might not be practical...

There are already trusted foundries for sensitive silicon.

https://www.dmea.osd.mil/otherdocs/AccreditedSuppliers.pdf

Re: Senate passes bipartisan bill to subsidize U.S.-made semiconductor chips

#74

Post by nyc_data_geek1 »

lettergram wrote: post #26

I disagree that subsidizing R&D to a few companies is going to make us more competitive. Look at GE or Boeing, it didn’t work out. What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form. It costs $0 tax dollars and brings in revenue and high paying jobs. Similar to what we did with car manufacturing.

Consider that semiconductor fab has a very high barrier to entry in that the cost and time required to bring it online.

No company presently appears to be poised to build out significant domestic chipmaking capability as far as I know.

I believe that this is where subsidization makes sense, because if we wait for the free market to catch up to the shortfall in supply created by raising import costs, it will ultimately take longer to get the manufacturing capacity online.

Re: Senate passes bipartisan bill to subsidize U.S.-made semiconductor chips

#75

Post by phkahler »

pm90 wrote: post #20

WaPo article, which has more details about the bill and less details about what different “personalities” are saying: https://www.washingtonpost.com/politics/2022/07/27/senate-ch... . Overall, it looks great. We absolutely need to fund more semiconductor manufacturing. Losing that ability to China/Taiwan was just a terrible strategic mistake. The US hasn’t lost this battle (over semiconductors) just yet. While curren…

>> We absolutely need to fund more semiconductor manufacturing. Losing that ability to China/Taiwan was just a terrible strategic mistake.

The correct solution to that is tariffs. That would hurt us short term and should have been done long ago before it would have been a problem. This will add to the debt pile, so it will be with us for a long time.

Re: Senate passes bipartisan bill to subsidize U.S.-made semiconductor chips

#76

Post by drexlspivey »

dangrossman wrote: post #41
drexlspivey wrote: post #28

Earlier quoted context omitted.

And that’s gonna be cheaper?

The goal isn't to be cheaper, it's to have a reliable domestic supply chain.

Which the bill will provide for a fraction of the cost

Re: Senate passes bipartisan bill to subsidize U.S.-made semiconductor chips

#77

Post by phkahler »

Alupis wrote: post #33
lettergram wrote: post #31

Earlier quoted context omitted.

Alternatively, you add a 20% tax on CPUs made outside the US. That would incentivize the fans manufactured in the US even if it’s a foreign company.

Or, chips just become 20% more expensive in the US and the consumer loses... and the US still doesn't gain supply chain security. I don't think tariffs will work when the alternative requires massive outlay of capital and decades to recoup. Not to mention, there is no reality where manufacturing these chips in the US costs less than Taiwan, for example. There is no reason to build a fab in the US with the current eco…

>> Or, chips just become 20% more expensive in the US and the consumer loses... and the US still doesn't gain supply chain security.

Push it up 50 percent. This quarter trillion dollars is going straight on the debt pile so it will hurt a lot, just not today.

Re: Senate passes bipartisan bill to subsidize U.S.-made semiconductor chips

#78

Post by bushbaba »

lettergram wrote: post #61
bpodgursky wrote: post #57

Earlier quoted context omitted.

Uh I mean yes Boeing is kind of a mess right now, but it's ridiculous to argue that having Boeing based in the US isn't an enormous strategic advantage. Can you imagine a world where US airlines had to depend on either Airbus or Sukhoi planes? Do you really think that would be better?

I don’t think subsidizing them has been a success. I think tariffs and awarding contracts to the best domestic manufacturers are the way forward. That’s why SpaceX took off, they won contracts. Boeing effectively lobbied to regulate others out of existence. Bought off who they could, then won grants and contracts because there was no one else.

Government spending could require multiple vendors. Encouraging at least a duopoly.

Re: Senate passes bipartisan bill to subsidize U.S.-made semiconductor chips

#79

Post by nyc_data_geek1 »

lettergram wrote: post #61
bpodgursky wrote: post #57

Earlier quoted context omitted.

Uh I mean yes Boeing is kind of a mess right now, but it's ridiculous to argue that having Boeing based in the US isn't an enormous strategic advantage. Can you imagine a world where US airlines had to depend on either Airbus or Sukhoi planes? Do you really think that would be better?

I don’t think subsidizing them has been a success. I think tariffs and awarding contracts to the best domestic manufacturers are the way forward. That’s why SpaceX took off, they won contracts. Boeing effectively lobbied to regulate others out of existence. Bought off who they could, then won grants and contracts because there was no one else.

Maybe a combination of the approaches. I might actually be in favor of raising import costs if there were a guarantee of some sort that the resulting funds would be applied to jumpstarting domestic chipfab capabilities, specifically to overcoming the initial capital intensive investment required to get started.

Re: Senate passes bipartisan bill to subsidize U.S.-made semiconductor chips

#80

Post by trhway »

ziddoap wrote: post #7
notlukesky wrote: post #3

The headline is wrong and deceiving. The semiconductor part is 52 billion. Still a lot of graft and corruption for negligent management. They could have given them tax subsidies for capex investment for example instead of corporate handouts and payoffs to the Pelosi stock positions.

Putting aside the fact the HN title is completely different from the article title, I don't even see where $280B (in the HN title) comes from... There's a $250B mentioned in the article body, not a $280B.

Couple senators walking to lunch just had a small talk with a lobbyist, and the number got adjusted a bit.
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