Odd Lots How the U.S. Lost Chip Dominance and How It Can Be Regained
Jan 14, 2021
In this discussion, Willy Shih, a Harvard Business School professor and tech industry veteran, analyzes the U.S.'s fall in semiconductor dominance. He explores how outsourcing and Taiwan Semiconductor's rise have contributed to this shift. The conversation dives into the importance of domestic manufacturing amid U.S.-China tensions and the risks posed by offshore production. Shih advocates for revitalization through innovative manufacturing models and highlights the crucial role of government support in reclaiming leadership in this vital industry.
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Semiconductor Importance
- Semiconductors are crucial for modern technology, impacting everything from Zoom meetings to online ordering.
- The declining US share of semiconductor manufacturing raises concerns about over-reliance on Asia.
High Fab Costs
- Setting up advanced semiconductor fabs now costs around $20 billion, a significant financial hurdle.
- Success requires high yields to offset costs; otherwise, much of the output becomes waste.
Intel's Shift to Microprocessors
- In the 1980s, Japanese manufacturers excelled in memory chip production, surpassing American companies like Intel.
- Intel strategically shifted to microprocessors, capitalizing on the IBM PC partnership and escaping the memory market challenge.
