Biden official reveals the failure behind America's epic chip shortage

crimsonaudio

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VERY pleased to see the Biden administration tackling this head-on - between this and pharmaceutical manufacturing (and a few other things), we've outsourced critical needs and left ourselves vulnerable.

"The reason we're really in this mess is because for a long time, we haven't invested," said Raimondo, a former venture capitalist and governor of Rhode Island. "We took our eye off the ball. We used to lead the world in semiconductor manufacturing and now we don't. We just disinvested."

Indeed, the US share of worldwide semiconductor manufacturing dropped to just 12% last year, according to the Semiconductor Industry Association. That's down from 37% in 1990. The trade group blamed "substantial" subsidies offered by foreign governments that place the United States at a "competitive disadvantage."

The Biden administration has pushed Congress to enact a $52 billion bill that would incentivize increased semiconductor production and research in the United States. That bill, called the CHIPS for America Act, passed the US Senate in June but hasn't been voted on in the House.

"It's pretty simple. We need to make more chips in America," Raimondo said.
 

Chukker Veteran

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I always seem to go back to WWII for an example to cite…

I’ve read accounts of how our country ramped up building battleships and airplanes and all that military equipment in an amazingly short time, and now we can’t make enough microchips?
 

TIDE-HSV

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VERY pleased to see the Biden administration tackling this head-on - between this and pharmaceutical manufacturing (and a few other things), we've outsourced critical needs and left ourselves vulnerable.



Chasing the cheapest labor possible. A couple of weeks ago, I read where some Mexico plants were considering relocating north of the border!
 

UAH

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VERY pleased to see the Biden administration tackling this head-on - between this and pharmaceutical manufacturing (and a few other things), we've outsourced critical needs and left ourselves vulnerable.

I am not a chip expert or of chip production at all but have worked with an organization that had a semi-conductor division focused on aerospace. I recall the greatest concern in 1978-79 time frame was that all of the semi-conductors critical to the defense industry were built in Japan. If we recall the development of the miniaturization of electronics occurred primarily in Japan and Taiwan which lead to essentially all home entertainment products moving off shore from the US. Utilization of semiconductors in automobiles naturally began in Japan. Development and manufacture of the I Phone is practically 100% in China and Taiwan which obviously lead to an explosion in the volume of chips being utilized in communications products. Today Taiwan Semiconductor is by far the largest chip manufacturer in the world and has committed billions in capital spending to expand production. They also have recently announced a 10% price increase across their product lines.

This is a fifty plus year narrative in the US and now we see the same concern from German manufacturers. I believe we can be assured that the US will not maintain the focus and spend the capital necessary over the next decade to make a meaningful impact on global chip production.
 

Jon

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VERY pleased to see the Biden administration tackling this head-on - between this and pharmaceutical manufacturing (and a few other things), we've outsourced critical needs and left ourselves vulnerable.




that article doesn't come close to discussing all of the issues here. As some of you know I work in this business. This is hurting us right now, even me personally to a small extent. I can't get paid until the Software I sell is actually consumed and have close to $40M in software waiting for hardware to run it on. Much of this has been since June and our ETA's continuing to slip. Years ago back in the y2k timeframe our entire industry went from specialized custom chips to commodity chips with the advent of virtualization as well as the move away from old legacy Mainframe/Unix to Windows environments. Now instead of having our own pools of chips and our own chip fabs we compete against everyone for the same stuff.

All that said, Cars are not an issue for us or others in IT. Much of what they use in cars is ancient by technology standards. This article in the WSJ touches on it but with a solid spin by Intel https://www.wsj.com/articles/intel-intc-2q-earnings-report-2021-11626899296 and it's CEO Pat.
 
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Jon

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I am not a chip expert or of chip production at all but have worked with an organization that had a semi-conductor division focused on aerospace. I recall the greatest concern in 1978-79 time frame was that all of the semi-conductors critical to the defense industry were built in Japan. If we recall the development of the miniaturization of electronics occurred primarily in Japan and Taiwan which lead to essentially all home entertainment products moving off shore from the US. Utilization of semiconductors in automobiles naturally began in Japan. Development and manufacture of the I Phone is practically 100% in China and Taiwan which obviously lead to an explosion in the volume of chips being utilized in communications products. Today Taiwan Semiconductor is by far the largest chip manufacturer in the world and has committed billions in capital spending to expand production. They also have recently announced a 10% price increase across their product lines.

This is a fifty plus year narrative in the US and now we see the same concern from German manufacturers. I believe we can be assured that the US will not maintain the focus and spend the capital necessary over the next decade to make a meaningful impact on global chip production.
we won't

No one will for the Auto business. Who wants to spend billions to open a fab to build 20 year old chips?
 

TIDE-HSV

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