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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

#91

Post by StillBored »

Alupis wrote: post #59
StillBored wrote: post #52

Earlier quoted context omitted.

I think in this case the US is different than say Chile because its such a large market. AKA its large enough to support home grown manufacturing if the incentives aren't out of wack. The chicken tax, as been an incredibly efficient way to assure that car's are manufactured in the USA, so much so that the cost difference between a Ford manufactured in Mexico and a Toyota manufactured in TX is basically 0.

How is this not the consumer still losing, though? There is no reality where manufacturing a car in Mexico costs the same as in Michigan. We've artificially increased the cost of the Mexico product... that is what will happen if you try that approach with chips - they will be more expensive for no real good reason. It also appears to cost many multiples more capital to build a chip fab than a car plant according to t…

Well its MX, vs TX, so maybe that is part of it, but I suspect there are other more significant differences, like for example ford sells ~7x the number of F-150's as Toyota sells Tundra's and that is only reflected in a ~3K difference in base price.

Its hard to have an exact 1:1 comparison, but I think most people would agree they are roughly the same price for roughly the same product. And yet one is largely designed and manufactured in the USA (the Toyota).

So, maybe they it costs more to employ someone in San Antonio, but maybe that doesn't really matter in the grand scheme of things vs flying engineers to MX to work out kinks in the assembly line.

And its probably the same with semiconductor manufacturing. Intel isn't behind because it costs more to manufacture things in the US, they are behind because they didn't invest in EUV, and made some technical mistakes, as well as business mistakes around contract manufacturing and refusing low margin deals.

I think if you look at the results of the IBM/Lenovo deals its abundantly clear that where the manufacturing was located had nothing to do with the success of the products (It was outsourced to Lenovo long before it became their business). The American management was the problem, and kicking it to the curb allowed them to grow the business 10X+.

And lets not ignore Samsung which has a large fab just down the road from me. So it can't be a terrible environment for USA based semiconductors if a Korean company is willing to fab things here.

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

#92

Post by Drblessing »

01100011 wrote: post #16

Such a monumental scam and a gross theft from taxpayers. Companies making billions of dollars in profits don't need free money. I could be onboard with a subsidized loan, but handouts are not needed. FWIW, I work at a company that stands to benefit from this bill. Does the US need to secure reliable semiconductor supply chains free of China? Sure. This is not the most cost effective way to do it.

It's as simple as this: If companies could manufacture chips profitably in America, they would be.

American Laws & Regulations prohibit domestic semiconductor manufacturing without Government subsidies.

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

#93

Post by 7thaccount »

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.

As they say "competition is for losers". They've all figured that out lol.

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

#94

Post by thomastjeffery »

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?

Could a market be free without tariffs? Does free not imply competitive?

US policy can't force South Korea or Taiwan to have a free market. No matter what we do, any domestic company has to be able to compete with Samsung and TSC. Because of that, there is no purely "free" global market.

Either you change the rules at the border (tariffs), you match your competitors' strategy (subsidize), or you lose.

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

#95

Post by ZetaZero »

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…

Intel had profits of $20B last year. They could easily build a new modern fab every year if they wanted to. But it makes more sense for them to spend tax payers money instead.

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

#96

Post by JadeNB »

tomohawk wrote: post #2

If it moves, tax it. If it keeps on moving, regulate it. If it stops moving, subsidize it. - Ronald Reagan

With no context, I'm not sure what you mean by this; but, without saying anything about the validity of the position, it's probably worth noting (as you surely know) that Reagan said this to satirize "big-government" perspectives on taxation. It was not his policy statement.

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

#97

Post by Drblessing »

vxNsr wrote: post #34

The sane way to do this would have been to give the handouts on condition of no stock buybacks for 10 years and cap total exec compensation for similar amount of time for any company that accepts the handouts. This should be true for any company that accepts gov money. The gov doesn't give money to benefit the stockholders, they’re doing it to benefit the larger economy and country. Stock holder shouldn’t even be con…

You have a great idea. It would be tough corralling the boards and execs of these companies to accept Gov money that limits their compensation. Still, with competition, one company would be incentivized to take the money.

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

#98

Post by judge2020 »

acchow wrote: post #84
connicpu wrote: post #29

Earlier quoted context omitted.

Tariffs on products we don't have immediate domestic manufacturing capacity for will hurt the economy in the short term, which is not a great move during a period of rising inflation. It's a tough decision though, because it does feel like the better move for the long term.

> Tariffs on products we don't have immediate domestic manufacturing capacity for will hurt the economy in the short term I suppose you could announce tariffs which will take place 5 years down the line? And ramp it up over time?

Congress offloads imposing tariffs to the executive branch, so they'd need to take it back to do that. Otherwise, it's just a countdown for the industry to donate enough to the opposing political party's PACs to get them in office and repeal the looming tariffs.

ie. the current bill only passed because both political parties are fine with giving companies government money.

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

#100

Post by goatcode »

01100011 wrote: post #16

Such a monumental scam and a gross theft from taxpayers. Companies making billions of dollars in profits don't need free money. I could be onboard with a subsidized loan, but handouts are not needed. FWIW, I work at a company that stands to benefit from this bill. Does the US need to secure reliable semiconductor supply chains free of China? Sure. This is not the most cost effective way to do it.

>This is not the most cost effective way to do it.

What would you recommend?

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