This is a really good article. Unfortunately, I think it is behind a pay-wall. I took 3 paragraphs out of various parts of the article to try and give the overview. The story does a good job documenting what those who work in semiconductors have said for a while. China was always going to struggle to play catch-up on the leading edge of technology, even with US companies practically giving away IP left and right until the last decade or so. Intel and TSMC make it seem easy, but it is the exact opposite of easy to fab these chips these days. The tariffs put in place initially by the Trump administration, then extended and broadened by the Biden administration is just crippling Chinese ambitions in this one field. https://www.theatlantic.com/interna...hina-microchip-technology-competition/678612/
The CHIPs act is one piece of legislation the Biden administration deserves credit on. Need to be able to source them directly from the US and not depend on Taiwan.
It was an excellent start. What would be a great follow up is a bi-partisan effort in Congress to fund bringing the entire supply chain on-shore. China still makes almost every printed circuit board, surface mount devices (SMDs) such as capacitors and inductors, as well most of the other chemicals needed. The US needs to 100% free itself from Chinese influence in my opinion.
I question whether the US can ever be cost competitive in commodity level electronic components - resistors, caps, etc. Reality is it's more expensive to build and operate a manufacturing facility here. I work in the embedded space. I've done projects where we refresh a board to squeeze a few dollars out of the bill of materials (i.e. production cost). Paying even .1¢ more for a resistor adds up when you have 4-500 of them sprinkled across a PCB, and there's simply no appetite for adding unnecessary cost in our corporate/capitalistic culture. (try saying that 3 times really fast) My (admitted limited) understanding is the CHIPs act is more about inducing companies like TSMC to manufacture the more complex chips here, not those basic commodity components. Which is a good thing, especially considering China/Taiwan tensions.
Unfortunately, building those chips in the US is completely useless if you have to ship die to China for Test and Assembly. Further, almost 100% of all chip substrates comes from China. Following the earthquake/title wave of 2011 Mu'Rata and others lost their Japanese based factories so they expanded their Chinese operations, so almost all of the SMDs that are packaged along with the die inside of a multi-chip module come from....China. I totally that on a $0.42 module, that even a $0.01 increase in cost for a resistor or capacitor inside the package matters. However, even in industries where everyone other than Intel struggle to maintain 50% gross margins, if the United States truly want independence from China, it will come with a cost. Finally, I recently toured a pilot production facility where they are producing capacitors and inductors for the electronics industry. There are state of the art robots almost everywhere and you can go quite some time without running into a human being. At scale, this type of plant will not only compete, but once the Cost of Quality is rolled into it, will likely exceed the dated, human powered, highly flawed Chinese factories. The reason that we do not fund ventures like this is that they bring very few jobs into a Congressional district for the large capital outlay using tax payer dollars or huge tax breaks, so it gives the appearance of the rich taking care of the rich...and that is not entirely wrong. But, this is how we can innovate our way to a more independent and secure future.
