Opinion: CHIPS for America is not enough

June 15, 2020 //By Peter Clarke
Opinion: CHIPS for America is not enough
It takes more than $22.8 billion to change the way global semiconductor players behave in a global economy. The US runs the risk of spending both too much and not enough.

For people outside the semiconductor industry $22.8 billion seems like a lot of money.

That is the amount of money the CHIPS for America bill proposes is provided over the next five years to stimulate the US semiconductor industry (see CHIPS for America Act promises $22.8 billion in aid). In particular, the bill wants to encourage the building of wafer fabs in the United States and significantly reduce dependence on off-shore production. But it is not enough to ensure that outcome.

In essence it is part of an attempt to fulfill President Trump's promise to "bring manufacturing back" to the United States. But it is not even clear that the $37 billion that the SIA originally lobbied for is enough (see US semiconductor industry seeks $37 billion government boost).

Even for politicians who deal with trillion-dollar annual budgets, the $22.8 billion to be given to the semiconductor sector seems like a lot of money. But it is not enough. Indeed, many politicians simply do not understand the semiconductor industry. Remember the European Commission's forlorn pleas for the European semiconductor industry to unite almost a decade ago (see European Commission repeats call for "Airbus of chips").

It is true that $22.8 billion will have some impact. Much of the money will end up getting wasted as government support money usually does, but some will make a difference. About half of the money is being targeted at R&D initiatives. It would be needed to develop the technical capabilities and ecosystem in the US to support leading-edge manufacturing. But again remember all that support that was spent on researching 450mm-diameter wafers.

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