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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

#141

Post by sbf501 »

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.

The reason why non-US cities manufacture so many semiconductors is that there is simply no profit. Capitalism has pushed manufacturing overseas. There are roughly 100-1000 more ARM chips than Intel chips in the world, but the profit margins are miniscule compared to Intel. If Intel made commodity chips, their shareholders would lose value. This bill basically subsidizes the already wealthy to get more wealth and probably won't do much since China will continue to expand while US fabs come online. Free hand of the market my ass.

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

#142

Post by [deleted] »

lettergram wrote: post #55
Cuuugi wrote: post #32

Earlier quoted context omitted.

"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?

Yes it is, there’s always been taxes. Free market typically refers to regulations, free commerce (means ability to buy and sell), etc. that doesn’t mean no taxes, particularly tariffs. The US federal government was initially only able to make revenue from tariffs. Basically you control the borders, but inside the borders there are no control (ie free market). Once you deal between nations, you cannot have a perfectly…

[deleted]

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

#143

Post by PragmaticPulp »

Someone1234 wrote: post #129

It should be noted that the US decided not to extend the universal free school meals program, because it was "too expensive" at $11B. They also stopped the expanded and early payment of family tax credits, causing a double-whammy hit to poor families (then pile on inflation/food prices, and gas prices). But $50B to large monopolistic companies isn't "too expensive," and we can afford that . Unfortunately 52 senators…

> It should be noted that the US decided not to extend the universal free school meals program, because it was "too expensive" at $11B.

Tragic, yes, but note that you can’t compare the price tags directly on bills like this because the headline number tends to be a mix of tax breaks combined with spending authorization stretch out over many years.

For example, $100 billion of the bill goes to domestic funding scientific research and fostering technology hubs. It’s spread out over 5 years.

I need to read the fine print of how this is all spread out, but it’s incorrect to read the headline and assume that chipmakers are getting $280B of checks next year.

For comparison, a bill authorizing the domestic lunch program over a similar 5 year term would likely be said to cost $65-70 billion due to the 5-year term and the inevitable rising prices over that term. (Note I’m not making any moral judgments about this, just putting it in context. I also didn’t verify any cost numbers from the parent comment, so don’t take my example as a fact)

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

#144

Post by C-x_C-f »

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…

This is always framed in terms of USA vs. China/Taiwan but what about Europe?

AFAIK (I might know wrong) the consensus among macroeconomists is that "social market economies" like European ones are better suited (compared to "liberal market economies" like the USA) to investing in large scale manufacturing (see e.g. Varieties of Capitalism [0]—though it is a bit controversial).

Though I do wonder if chip manufacturing might just be too large for the EU to handle. Many people in Europe keeps saying that e.g. Ericsson could start a fab but I'd be curious to see if a bill like this would succeed in the EU.

[0] https://en.wikipedia.org/wiki/Varieties_of_Capitalism

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

#145

Post by chalst »

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?

No, lettergram is misusing the term 'free market'. Free marketeers don't just want less government enterprise, they also want lower tariffs and light regulation.

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

#146

Post by [deleted] »

braingenious wrote: post #46
camjohnson26 wrote: post #9

Earlier quoted context omitted.

nvidia, which they sold today at a large loss.

By “they” are you talking about Paul Pelosi? Can somebody explain how buying stock for $100(1) and selling at $165 causes a loss? I’m not being flippant, it’sa serious question. 1. https://www.businessinsider.com/nancy-pelosi-stock-trades-pa...

[deleted]

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

#147

Post by guelo »

Someone1234 wrote: post #129

It should be noted that the US decided not to extend the universal free school meals program, because it was "too expensive" at $11B. They also stopped the expanded and early payment of family tax credits, causing a double-whammy hit to poor families (then pile on inflation/food prices, and gas prices). But $50B to large monopolistic companies isn't "too expensive," and we can afford that . Unfortunately 52 senators…

No post body was provided.

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

#148

Post by alexb_ »

For your convenience, the text of the bill is here: https://docs.house.gov/billsthisweek/20220725/BILLS-117HR434.... Relevant text for semiconductor funding is on page 10.

The bill says "for section 9902/9906 of Public Law 116-283". This can be found on page 1460 here: https://www.congress.gov/116/plaws/publ283/PLAW-116publ283.p...

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

#150

Post by clairity »

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.

i'm with you that a tariff scheme is better than giving money to large corps, which always puts money in the pockets of the already rich rather than into creating customer surplus and driving innovation. there is a (mostly front-loaded) cost, but there is also a clear net benefit in the long run. the tariff scheme just needs to be graduated (both on and off) and based on industry milestones. if it isn't ramped down as soon as feasible, then it becomes a overly-depended-upon subsidy and a market distortion masking price signals instead.

because we know there is a large and likely growing demand for semiconductors, it's not a very risky bet for us to be subsidizing it via trade restrictions for some finite amount of time.

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