The challenge for the US is that a 12-inch slice of silicon — layered with chemicals at microscopic dimensions by US$150 million machines in US$10 billion factories — isn’t very useful. In fact, a completed wafer doesn’t do anything — it cannot play a video, process an image or guide a warhead. Yet that’s all a semiconductor fab churns out, with great difficulty and at high cost. TSMC is currently the only company in the world that can produce the most-advanced chips, and does so with an annual capex budget of US$36 billion and US$5 billion in R&D.
US politicians, business leaders and think-tank analysts seem to believe that locally-made chips will fortify the nation’s technology supply chain at a time when global tensions are running hot. They’re mistaken, and that error could push the US into even greater dependence on foreign manufacturers.
Passage of the $52 billion CHIPS Act in August is rightly hailed as a landmark move to rebuild America’s role in the semiconductor industry. Chipmakers, both in the US and overseas, are incentivized to set up more facilities on local soil and many are doing just that. Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. announced expansion plans, and made clear that such projects will depend on government money.
