Senate seeks to spur U.S. processor manufacturing with $30 billion fund

Posted:
in General Discussion edited March 5
A new $30 billion fund is being considered by the U.S. Senate to spur American chipset manufacturing in a new effort to reduce reliance on China.

U.S. Senate considering a $30 billion fund to boost chipmaking
U.S. Senate considering a $30 billion fund to boost chipmaking


American companies have long-relied upon Chinese manufacturers to supply chipsets for everything from smartphones to automobiles. With the current global shortage of semiconductor chips, the U.S. Senate seeks to spur American chipset manufacturing.

Reuters reports that a vote is set to be held in April over a $30 billion fund for boosting the U.S. tech sector. This package is being heralded by Senator Schumer, but officials declined to comment on the matter directly.

The bill may have originated from Schumer's previous demands for a bill to compete against China in the tech sector. One program would provide grants to companies investing in U.S. factories for semiconductor manufacturing, testing, and research.

There are also looming security concerns over using Chinese manufacturing sources. While stories like the "Big Hack" from Bloomberg never coalesce into something tangible, the American fear of Chinese spies in semiconductors is real. This bill would seek funding for "measurably secure microelectronics" built in the United States.

Apple chipset manufacturer TSMC has shown interest in building a plant in Arizona. The company has even resorted to bond sales in order to gather funds for the project. The factory isn't expected to be in full operation until 2024.

The chipset shortage affects more than game consoles and smartphones, as automakers have had to slow production of vehicles due to the shortage. Apple's reliance on Ultra-Wideband chipsets have been impacted by the auto industry's needs as well. A $30 billion fund may cause companies like TSMC to accelerate plans of building factories in the U.S.
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Comments

  • Reply 1 of 24
    JWSCJWSC Posts: 874member
    Pork for the wealthy.  Gotta love it. 😒
  • Reply 2 of 24
    Tech607Tech607 Posts: 8member
    The better way of handling this is to tax their products as they come back into this country. Do this until they learn that if you hurt the American people by manufacturing in China it will cost you where it hurts. Not give them millions just so they take that cash and still move most of their operations over seas. 
    watto_cobra
  • Reply 3 of 24
    Interesting how we can continue to find money for businesses, but can’t pay higher minimum wages, UBI or have free (by taxes) healthcare in the US…. 
    ITGUYINSDOferwatto_cobra
  • Reply 4 of 24
    mknelsonmknelson Posts: 663member
    Tech607 said:
    The better way of handling this is to tax their products as they come back into this country. Do this until they learn that if you hurt the American people by manufacturing in China it will cost you where it hurts. Not give them millions just so they take that cash and still move most of their operations over seas. 
    Either way it will cost the American people - either though higher costs on the product (that's what happens with duties) or taxpayer funded subsidies.

    This at least has a more direct chance of brining in some good paying jobs.
    baconstangDogpersonOferjony0watto_cobra
  • Reply 5 of 24
    baconstangbaconstang Posts: 659member
    I'd rather see low interest loans than grants.
    Maybe forgivable if factories are actually built and jobs created.
    watto_cobra
  • Reply 6 of 24
    robabarobaba Posts: 69member
    Encouraging insourcing of a product critical to our economy and security as a nation should not be considered swamp material out of hand.  Sure it COULD BE structured that way, but they could just as easily build in verifiable metrics and claw backs with teeth to ensure domestic production is increased and not just the manufacturers bottom line.  There must be a decades long commitment, though.  One short term bill won’t move the needle.
    baconstangDogpersonwatto_cobra
  • Reply 7 of 24
    tzeshantzeshan Posts: 2,351member
    Tech607 said:
    The better way of handling this is to tax their products as they come back into this country. Do this until they learn that if you hurt the American people by manufacturing in China it will cost you where it hurts. Not give them millions just so they take that cash and still move most of their operations over seas. 
    Strongly agree! US companies got taxed for selling products in USA. Foreign companies making money selling products in USA should be taxed on the portion of the profit they sell in US. If these companies are publicly traded this number should be easy to calculate. This is the real effort US government should work with foreign governments not just China. 
    watto_cobra
  • Reply 8 of 24
    baconstangbaconstang Posts: 659member
    JWSC said:
    Pork for the wealthy.  Gotta love it. 😒
    Then the F35 must be the whole pig...
    viclauyycwatto_cobra
  • Reply 9 of 24
    cloudguycloudguy Posts: 324member
    We already have several foundries. Why not just help them get to 7nm/5nm/3nm? Really the focus should be maybe getting them to 10nm because - TBH - not everything needs to compete with the iPhone 12 and the Mac Mini on power per watt. The vast majority of the chips that Qualcomm sells every year aren't on the latest process. None of the MediaTek chips are - as avoiding the latest process is a core part of MediaTek's business strategy - and Nvidia's GPUs are generally behind also.

    So just give GlobalFoundries a grant or loan to buy a bunch of 10nm and 7nm nodes and significantly increase their capacity. Then heavily tax Qualcomm and Nvidia if they choose to have TSMC or Samsung fab their chips that are on the same process. Let Qualcomm and Nvidia continue to go to TSMC and Samsung for 5nm, 3nm and 2nm chips through 2024 for their 8xx and competing chips. But their 7xx and especially 4xx chips - according to this idea - would shift to GlobalFoundries.

    Seriously, if we are going to do corporate welfare, why not use it to create our own solar and windmill manufacturing companies? Right now we only have a few and we get most of them from overseas. Getting a bunch of massive solar panel and windmill design and manufacturing operations going could be done a lot faster and cheaper. Direct them to swing states that are going to lose a bunch of fossil fuel related jobs thanks to Biden regulations - New Mexico and Pennsylvania for example - for maximum impact. Then there is Florida. Oil companies have been wanting to do offshore drilling there for decades but both parties say no: the Democrats for environmental reasons and Republicans because residents don't want it. Build a bunch of offshore windmill farms in the places where the oil companies want to do more Deepwater Horizon type projects and that would be a political and economic win also.

    But so long as the policy is merely bashing the evil fossil fuel companies without providing jobs or infrastructure to take its place - the AOC strategy - it is never going to become politically popular or widely adopted.
  • Reply 10 of 24
    lkrupplkrupp Posts: 8,878member
    mknelson said:
    Tech607 said:
    The better way of handling this is to tax their products as they come back into this country. Do this until they learn that if you hurt the American people by manufacturing in China it will cost you where it hurts. Not give them millions just so they take that cash and still move most of their operations over seas. 
    Either way it will cost the American people - either though higher costs on the product (that's what happens with duties) or taxpayer funded subsidies.

    This at least has a more direct chance of brining in some good paying jobs.
    Those ‘good paying jobs’ will be filled by H-1B foreign workers because the American labor force has neither the talent, the expertise, nor the work ethic to fill those positions. These chip factories will be highly automated and require only a small force of specialized engineers. The only job available job for John Q will be cleaning the toilets. Just my opinion.
    edited March 5 watto_cobra
  • Reply 11 of 24
    avon b7avon b7 Posts: 5,586member
    Maybe it's because I'm in Europe but partial government funding for projects like is the way to go IMO.

    That said, although there is justification for certain industry usage cases, prices will probably be more expensive than competing and fully established supply chains.


  • Reply 12 of 24
    JWSCJWSC Posts: 874member
    mknelson said:
    Tech607 said:
    The better way of handling this is to tax their products as they come back into this country. Do this until they learn that if you hurt the American people by manufacturing in China it will cost you where it hurts. Not give them millions just so they take that cash and still move most of their operations over seas. 
    Either way it will cost the American people - either though higher costs on the product (that's what happens with duties) or taxpayer funded subsidies.

    This at least has a more direct chance of brining in some good paying jobs.

    Those good paying jobs you’re talking about would only be temporary. Without fundamental changes in the economic environment (and I’m really referring to U.S. Government taxes and regulation) those jobs will require permanent subsidies, which is a non-starter.

    For too long, the unchallenged assumption that China has an inherent manufacturing advantage over the U.S. has diverted our collective attention away from our self inflicted sclerosis due to vast over-regulation (see California) coupled with self defeating and job destroying minimum wage requirements.

    The U.S. is full of self-starting individuals and small businesses that would jump at the chance to change the world.  The entrepreneurial spirit is still alive and well.  And despite what some claim, the U.S. still has unrivaled talent in these core technologies.  But it needs to be repeated over and over that the Government needs to get OUT OF THE WAY.  Unfortunately, that stance seems to be increasingly unpopular these days.  It appears that we’d rather spend money to correct a problem that has an easy and costless to the taxpayer fix.

    lkrupp
  • Reply 13 of 24
    stukestuke Posts: 106member
    It’s not just corporate welfare. Having chipset manufacturing technology in the USA is vital for defense initiatives as the world moves more and more to electronic defense, security, and yes, attack. Dependence on foreign foundries is currently a big issue and source of tension in these sectors of American life. 
    JWSCbaconstang
  • Reply 14 of 24
    JWSCJWSC Posts: 874member
    stuke said:
    It’s not just corporate welfare. Having chipset manufacturing technology in the USA is vital for defense initiatives as the world moves more and more to electronic defense, security, and yes, attack. Dependence on foreign foundries is currently a big issue and source of tension in these sectors of American life. 
    What you state is undeniably true.  But throwing tax dollars in the form of subsidies at this industry is only putting a temporary Band-Aid on the problem.  The patient will continue to bleed assuming nothing else changes.
  • Reply 15 of 24
    tommikeletommikele Posts: 437member
    Tech607 said:
    The better way of handling this is to tax their products as they come back into this country. Do this until they learn that if you hurt the American people by manufacturing in China it will cost you where it hurts. Not give them millions just so they take that cash and still move most of their operations over seas. 
    Wrong. Just like the "trickle down" garbage from Reagan, Bush and Trump, tariffs and duty taxes have been proven time after time to not stimulate capital investment and production. Without that you will not have more jobs for Americans and reduced dependence on foreign sources. By simply levying tariffs and duty taxes all you will accomplish is to take money away from the end users of these products and hurt Americans - the exact opposite of the goal. How did Trump's tariffs and duty taxes work out? They were a complete failure that only succeeded in taking money from our pockets. Without domestic production all it meant was we pay more for the same thing.

    If you did  a little research on the proposal you would find it is for capital investment and to provide incentives to build new production facilities. If it results in new profit sources and provides jobs and reduces dependency so be it. Unless you want to go socialist, profit is essential. You don't want to go socialist or Marxist economics or do you?

    Fake MAGA garbage like we have seen the last four years is what picks our pockets and allows the money to be stolen from taxpayers while no gains in jobs or cost reductions are made.
    edited March 5 baconstangjony0
  • Reply 16 of 24
    Corporate socialism! Republicans will back this and double up on the handouts!
    baconstang
  • Reply 17 of 24
    viclauyycviclauyyc Posts: 627member
    It should say “ American companies have long-relied upon TAIWANESE manufacturers to supply chipsets for everything from smartphones to automobiles.”

    Sure China, PRC, make some semiconductor but mainly lower end chip. The majority of chip is made by TSMC, which is a Taiwan (ROC), company. And Taiwan is the good China. 

    Know the difference 
    FileMakerFeller
  • Reply 18 of 24
    danoxdanox Posts: 485member
    JWSC said:
    mknelson said:
    Tech607 said:
    The better way of handling this is to tax their products as they come back into this country. Do this until they learn that if you hurt the American people by manufacturing in China it will cost you where it hurts. Not give them millions just so they take that cash and still move most of their operations over seas. 
    Either way it will cost the American people - either though higher costs on the product (that's what happens with duties) or taxpayer funded subsidies.

    This at least has a more direct chance of brining in some good paying jobs.

    Those good paying jobs you’re talking about would only be temporary. Without fundamental changes in the economic environment (and I’m really referring to U.S. Government taxes and regulation) those jobs will require permanent subsidies, which is a non-starter.

    For too long, the unchallenged assumption that China has an inherent manufacturing advantage over the U.S. has diverted our collective attention away from our self inflicted sclerosis due to vast over-regulation (see California) coupled with self defeating and job destroying minimum wage requirements.

    The U.S. is full of self-starting individuals and small businesses that would jump at the chance to change the world.  The entrepreneurial spirit is still alive and well.  And despite what some claim, the U.S. still has unrivaled talent in these core technologies.  But it needs to be repeated over and over that the Government needs to get OUT OF THE WAY.  Unfortunately, that stance seems to be increasingly unpopular these days.  It appears that we’d rather spend money to correct a problem that has an easy and costless to the taxpayer fix.



    America’s management talent lies in being anti worker, anti union and slave labor at all cost, git yer low payed gig on. Have money for the workers give it to management instead so they can buy something for themselves. Lamborghini anyone.....
    baconstangFileMakerFeller
  • Reply 19 of 24
    danoxdanox Posts: 485member

    stuke said:
    It’s not just corporate welfare. Having chipset manufacturing technology in the USA is vital for defense initiatives as the world moves more and more to electronic defense, security, and yes, attack. Dependence on foreign foundries is currently a big issue and source of tension in these sectors of American life. 

    It is welfare for the rich, a Korean company (Samsung) has a 7 billion plant in Texas, Apple can and could put plant anywhere in the USA for pocket change without anyone’s (government) help.
  • Reply 20 of 24
    Oh. China is bad again?

    Can't keep up with the new political overlords.  

    Wonder who gets to touch this money.

    If it is the same old tech corps, then we are in trouble. 
    edited March 6
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