Explore the race for semiconductor supremacy as the U.S. strives to reclaim chip manufacturing from Taiwan amidst geopolitical tensions. Learn about the implications of President Biden's CHIPS Act and its potential impact with changing administrations. Discover the challenges faced by companies like TSMC establishing roots in Arizona, and the urgent need for skilled labor in the semiconductor industry. Delve into how training programs are addressing workforce gaps, while considering the competitive landscape shaped by U.S.-China relations.
The U.S. aims to regain its semiconductor manufacturing dominance through the CHIPS Act, but political uncertainty threatens its long-term viability.
Revitalizing the U.S. semiconductor industry requires addressing the urgent need for skilled technicians and specialized training programs.
Deep dives
The Shift in Semiconductor Manufacturing
The semiconductor manufacturing landscape has undergone a significant shift over the years, transitioning from U.S.-centric production to a model dominated by foundries abroad, particularly in Asia. The foundry model allows companies to focus on designing chips while outsourcing manufacturing, leading to a competitive advantage for firms like TSMC, which has thrived thanks to substantial state support in Taiwan. As the U.S. attempts to reclaim its former dominance in semiconductor production through initiatives like the CHIPS Act, it faces the challenge of overcoming decades of offshoring and establishing a robust domestic manufacturing capability. The integration of design and manufacturing, once prevalent in the industry, has diminished, complicating efforts to modernize and compete with established Asian manufacturers.
Political and Economic Implications of the CHIPS Act
The CHIPS Act represents a substantial U.S. government investment aimed at revitalizing domestic semiconductor manufacturing, but its future is threatened by shifting political dynamics. Former President Trump has voiced skepticism about the effectiveness of taxpayer-funded subsidies, advocating instead for tariffs on imports to incentivize companies to relocate to the U.S. This potential policy change raises concerns about the sustainability of investments from companies like TSMC, which play a critical role in America's strategy to counter China's technological rise. There is a palpable sense of uncertainty surrounding the act's implementation, as the industry's reliance on government support must navigate the complexities of changing political landscapes.
Educational and Workforce Development Challenges
Efforts to build a skilled workforce for the semiconductor industry in the U.S. are crucial for the success of initiatives like the CHIPS Act, yet they face significant hurdles. The current demand for skilled technicians far exceeds the available workforce, necessitating rapid training and development programs to bridge the gap. Institutions like Arizona State University are stepping up to provide education and training specifically tailored to the semiconductor sector, but the process typically requires time and resources to be effective. Moreover, the higher costs of operating in the U.S. compared to Asia complicate the challenge of attracting and retaining talent in a field that demands specialized knowledge and experience.
The next superpower will be a tech superpower, and to be that superpower you need to have some control over the semiconductor industry which is driving the AI revolution. But almost all advanced semiconductors are made in Taiwan — and it is under constant threat of a Chinese invasion. President Joe Biden’s Chips Act promises lavish subsidies to companies working to bring semiconductor manufacturing back to US soil. Will those subsidies survive once Donald Trump, the president-elect, is in the White House? The FT’s James Kynge, is in Phoenix, Arizona, the former heartland of American chip manufacturing. He speaks to those trying to revive the US chipmaking industry.
Presented by James Kynge. Edwin Lane is the senior producer. The producer is Josh Gabert-Doyon. Executive producer is Manuela Saragosa. Sound design by Breen Turner and Samantha Giovinco, with original music from Metaphor Music. The FT’s head of audio is Cheryl Brumley. Special thanks to Tim Bradshaw.
