Congress approves $52 billion funding to aid semiconductor manufacturing. President Biden is expected to sign the bill into law. More than 65% of the chips are made in Taiwan. Companies like Apple and Nvidia don’t have their own semiconductor manufacturing facilities. They design the chips and rely on foundries( contract manufacturers) like TSMC to manufacture them. Overtime, the dependency on chip manufacturing in Taiwan grew and currently only ~10% of chips are made in the USA. As the China-USA rivalry intensifies, this Taiwan chip dependency becomes a national security threat. If the foundries in Taiwan grind to a halt due to war or a Chinese takeover, America won’t have the chips to make iPhones, GPUs, SpaceX rockets, ballistic missiles, etc. It makes a lot of sense to move the manufacturing of mission critical chips back to the USA.
I grew up in Taiwan and majored in Electrical Engineering at National Taiwan University. Many of my bright schoolmates in college went to work for TSMC. I think the $52B funding is good but money isn’t everything. There is not enough semiconductor manufacturing talent in the USA. Semiconductor manufacturing is very capital intensive and the workers don’t get paid a lot. But to make a semiconductor manufacturing plant work, it’s a big orchestration of the right equipment, right processes and right people. To get the right people in the USA, they need to be paid a lot more and that’s why the manufacturing was moved offshore in the past few decades. Changing the immigrant policy to allow more foreign talent in semiconductor manufacturing is probably a more effective way to jumpstart chip manufacturing in the USA than free money. In the long run, the USA has to come up with ways to develop and retain talent in the semiconductor sector to counter threats from China and to stay competitive globally.
Speaker Pelosi is currently visiting Taiwan. China kept threatening her and asked her not to go, saying "These moves, like playing with fire, are extremely dangerous". Well, Speaker Pelosi and the Congressional delegation get to go where they want to go. Since when does China tell American politicians what to do? Isn’t America the greatest country in the world? To retaliate, China launched a DDos attack on the presidential office website in Taiwan, banned food imports from Taiwan to China and is launching aggressive military exercises opposite Taiwan. I am slightly worried that things could boil over. But as China wants to be No. 1 to sideline America and call the shots on the global stage, the conflict between China and the USA might be inevitable. Semiconductor manufacturing race is just a start.