Economist Podcasts

Trust the processor: America’s CHIPS Act one year on

5 snips
Aug 9, 2023
Shailesh Chitnis, a business writer at The Economist with a focus on the semiconductor industry, teams up with international reporter Avantika Chilkoti, who analyzes Britain’s foreign aid. They dissect the CHIPS Act, discussing its early successes and the ongoing challenges in U.S. semiconductor production, especially compared to Taiwan. They also tackle the controversial merger of UK's aid departments and its implications on international support. Lastly, they delve into the innovative sound branding of electric vehicles, showcasing the creative side of automotive marketing.
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INSIGHT

CHIPS Act Goals

  • The CHIPS Act aims to boost US semiconductor manufacturing, shifting from a design-focused role to increased production.
  • By 2025, the US is projected to have 18% of global leading-edge chip capacity, a substantial increase from its current near-zero share.
ANECDOTE

US Fab Challenges

  • Building fabs in the US is proving more complex, costly, and time-consuming than in Asia.
  • TSMC's Arizona fabs face delays and cost overruns due to regulations, labor shortages, and higher operating expenses.
INSIGHT

Cost Discrepancies

  • US fab construction costs are 30-40% higher than in Asia, primarily due to higher labor costs.
  • Operating costs are also estimated to be 30-35% more expensive in the US.
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