Silicon Industry Association: $50 billion are needed to bring chip manufacturing to the US

nanoguy

Posts: 590   +8
Staff member
In brief: American semiconductor giants are planning to build up to 19 manufacturing plants in the US, but they won't do it without substantial federal investment. What they're asking is that the US government spend at least half as much as China does for securing a larger share of global semiconductor manufacturing.

In July we took a deep dive into China's ambitious plan for technological self-sufficiency, which is largely motivated by the US-China trade war and the insistence on replacing all foreign hardware and software solutions from its public infrastructure.

At the same time, the Trump administration has been pushing hard for manufacturing to be brought back to the States, especially when it comes to the electronics industry. The "Made in America" initiative has had limited success, with Apple being heralded as a positive example while Foxconn's long-promised Wisconsin plant -- which still hasn't opened -- will merely produce "robotic coffee houses".

According to the Silicon Industry Association, America's semiconductor giants are theoretically inclined to reverse the long trend of moving production to Asia. But to achieve that goal, they're asking Washington to mirror China's aggressive investment strategy. To appease these companies, the US government would have to deploy anywhere from $20 billion to $50 billion -- a fraction of the $100 billion that China is pouring into government subsidies for semiconductor companies.

SIA represents several industry giants such as Intel, Nvidia, AMD, and Qualcomm, noting that "six months ago, I don't think we could have had this discussion, the world's gone in our direction." This suggests that companies believe it's the right time to pitch this idea, as it will become increasingly risky for the US to rely on China, Taiwan, Singapore, South Korea, and Israel for vital components used in its electronics -- especially in the context of the coronavirus pandemic.

The downside is that building a manufacturing plant in the US is estimated to cost ~30 percent more over the span of 10 years than it does in Asia. Total operational costs over that period can reach as high as $40 billion, but government incentives could cut that to just $13 billion. This is because chip makers already invest approximately one fifth of their annual revenue into research and development.

The association is also banking on the Creating Helpful Incentives to Produce Semiconductors for America Act (CHIPS), which would inject tens of billions of dollars into researching, developing, and manufacturing semiconductors in the US. The bill has already garnered bipartisan support and would introduce a refundable investment tax credit for companies that need to purchase semiconductor manufacturing and testing equipment.

Last month, Foxconn said China can no longer be the world's factory, but given the number of alternative locations that are just as cheap, the US has only a small window of opportunity to bring manufacturing back home. SIA believes that federal manufacturing incentives are key to making the US a more attractive option and creating up to 70,000 high-paying jobs for engineers, fab technicians, and material suppliers.

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HotToz

Posts: 23   +27
I don't think this is realistic. TSMC and SAMSUNG are 3 years ahead of everything in States. Second Asia produce a lot of those RAW materials which they can easily ban export to US, that will mean develop new materials/methods (more cost)
 

seeprime

Posts: 497   +537
I don't think this is realistic. TSMC and SAMSUNG are 3 years ahead of everything in States. Second Asia produce a lot of those RAW materials which they can easily ban export to US, that will mean develop new materials/methods (more cost)
That's what cost projections and timetables are for, to show the plans to investors.
 

Thanthan

Posts: 49   +97
"Wed like not to deal with dictatorships, but we really like the dictatorships money" is All I can hear. Its not like these business es wouldnt be profitable in the US or Europe or where er, its just that they really enjoy the Cash the CCP is throwing at them.
 
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Endymio

Posts: 691   +553
I don't think this is realistic. TSMC and SAMSUNG are 3 years ahead of everything in States.
TSMC is coming to the United States, thanks to new tax policies here and concerns over China's future moves towards Taiwan.

Second Asia produce a lot of those RAW materials which they can easily ban export to US
The raw material for silicon chips is silicon ... found in common sand. In any case, the bottleneck for semi manufacturing isn't the raw materials, its the fab equipment, euv sources, masks, optics, etc -- and most of that is in the US, Europe, and Japan.