Although two different versions of the Chips Act have been separately passed by the US Senate and US House of Representatives, the next stage – of reconciling the two versions – has so far taken three months.
At Davos, Raimondo expressed her frustrations to CNBC saying: “It is a huge national security issue and we need to move to making chips in America, not friend-shoring,” she said.
‘Friend-shoring’ apparently means working with friendly foreign countries to secure supplies.
Raimondo has just been to see a Samsung fab in Korea and said she’d like to see a similar “amazing manufacturing operation” built in the USA. (She only has to go to Texas to see a Samsung fab operating in Austin and another one being built in Taylor).
“If Congress doesn’t pass the Chips Act and pass it quickly, we’re going to lose out on that,” said Raimondo, “Intel, Micron, Samsung – they’re growing, they’re going to build future facilities. If Congress doesn’t move quickly, they’re not going to build them in America. They’re going to continue to build them in Asia and in Europe, and we risk losing out on that.”
Intel, of course, is spending $20 billion building two fabs in Arizona and is planning a $100 billion eight fab site in Ohio, while Samsung is spending $17 billion on its Taylor fab site – but this is a politician making a one-sided case.
Even worse, according to Raimondo: “America buys 70% of its most sophisticated chips from Taiwan,” she said, “those are the chips in military equipment. There’s like, 250 chips in a javelin launching system. You want to be buying all that from Taiwan? That’s not secure. Pass the bill, Congress, pass Chips and let’s get to the business of making those chips in the United States of America to secure our future.”
Of course the reason why all these chips get made in Asia is because US chip companies sub-contract their chip manufacturing to Asian countries because to do so gives them better profit margins than making the chips in the USA.
For Raimondo (an American Commerce Secretary) the profit motive was an irrelevance.
“Some things are more important than price,” she said, “you can’t put a price on America’s national security. The fact that we’re buying two thirds of our chips from Taiwan and these are the chips we need to keep Americans safe and secure — we’ve got to make those in America, period.”
The delay in passing the Chips Act may not be entirely due to the current deadlock in the US Congress which is stopping most Bills getting passed, it may also be due to the fact that US chip companies held a 54% market share of the world chip market last year and this might be dissuading some Congressmen from supporting the proposition that the US chip industry needs a $52 billion hand-out from the taxpayer.
Firebrand leftie Senator Bernie (‘The Bern’) Sanders dismissed the Chips Act as “corporate greed”.
It looks as if its passage into law is far from a foregone conclusion.
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May 27, 2022 at 07:00AM
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Chips Act Looking Iffy - Electronics Weekly
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