Pelosi, Schumer Urged To Pass Chip-Funding Bill by 21-Industry Group (bloomberg.com) 87
A group of 21 industry groups aligned with the automotive and technology sectors is calling for Congress to finalize work on a bill to fund increased domestic chip production. From a report: Congress in 2021 authorized federal spending on research and design initiatives to boost domestic chip production and create a subsidy for domestic manufacturers. But the money still needs to be included in an appropriation measure before it can be doled out.
"It is essential Congress act swiftly to provide funding to make this law a reality," the groups wrote in a letter to U.S. House Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer, House Minority Leader Kevin McCarthy and and Senate Minority Leader Mitch McConnell. A global semiconductor shortage that traces its origins back to the beginning of the Covid-19 pandemic in the spring of 2020 has hampered U.S. car manufacturing and increased prices for consumers. Carmakers are competing with other makers of other electronic devices affected by the shortage, such as computers and mobile phones, for chips that have remained scarce for more than a year.
"It is essential Congress act swiftly to provide funding to make this law a reality," the groups wrote in a letter to U.S. House Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer, House Minority Leader Kevin McCarthy and and Senate Minority Leader Mitch McConnell. A global semiconductor shortage that traces its origins back to the beginning of the Covid-19 pandemic in the spring of 2020 has hampered U.S. car manufacturing and increased prices for consumers. Carmakers are competing with other makers of other electronic devices affected by the shortage, such as computers and mobile phones, for chips that have remained scarce for more than a year.
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They don't need to hand out the shares. It's understood that one of the perks of passing a bill like this is, you get to purchase the shares before you pass the bill, knowing the stock will go up after the bill is passed. All legal, and above board. No need for any of those back door shenanigans.
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For the time being, anyway. For the first time, there is a bipartisan and bicameral effort to pass a trading ban for congress critters [cnbc.com], which should have been done years ago. And if you look at the list of 56 co-sponsors [congress.gov], it's a list of very odd bedfellows including Alexandria Ocasio-Cortez (D) and Matt Gaetz (R) actually agreeing on something. Pelosi decided to get the hell out of the way last week, and Schumer is on board in the Senate - we might actually see movement on this for once.
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Don't worry, Pelosi is already on top of that one. She wants to extend to ban to all federal officials.
All of them.
Think about that for a moment.
Non-paywall link and references (Score:4, Informative)
Article is a bit light on details and this is interesting:
https://www.bloombergquint.com... [slashdot.org]">Pelosi, Schumer Urged to Pass Chip-Funding Bill by 21-Industry Group
Industry Group pushing for htis (obviously) [semiconductors.org]
Original 2020 bill - H.R.7178 - CHIPS for America Act [congress.gov]
New Senate Bill - S.1260 - United States Innovation and Competition Act of 2021 [congress.gov]
New House Bill - H.R.4521 - America COMPETES Act of 2022 [congress.gov]
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Oof i fudged that first link up [bloombergquint.com]
Can't read the article (Score:2)
Always funny how private business wants the free markets to work until it's not in their interest.
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The issue is that we don't want the free market outcome (overseas production) because it runs contrary to our national security.
Re:Can't read the article (Score:4, Insightful)
Then they shouldn't have outsourced production to Asia in the first place.
I think this bill is a waste of money. Pelosi and Schumer should hold a press conference with the CEOs of those 21 companies and bluntly ask them how much their profits increased since they moved manufacturing out of the US. And then they should tell them to fuck off. And then, as Democrats, they should fuck off, themselves.
Re:Can't read the article (Score:4, Insightful)
Re: Can't read the article (Score:1)
Even when Democrats are in control they still suck corporate cock. It was Clinton for example who let us get where we are today with media conglomerates. Don't get me wrong, I still prefer the friendlier fucking from the Dems over what you get from the reps but let's not imagine that they aren't corporate-owned.
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The irony being that corporate donations to Republicans, especially outspoken pro-coup Republicans, are down double-digit percents over two years ago, and far more than the same measurements for Democrats. [fortune.com]. And the highest profile pro-coup Republicans are down 75 to 97% on corporate donations over the same time period.
Turns out that corporate America are fans of democracy and would like those that helped try to fuck it up to go away. Or, at least, they're fans of not looking like they support asshats that
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In general they spend more on Democrats, I always presumed this meant that Republicans were more cheaply bought.
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It's been occurring under the watch of both Democratic and Republican administrations. Nixon helped to normalize relationships, Clinton gave them most favored nation trade status with Congressional approval, and none of the subsequent Presidents or Congresses made any real attempt to stop the manufacturing exodus, probably because no one really believed China could catch up to us technologically. It was only a couple of years ago I saw a Republican introduce a bill to revoke MFN status for China. Natural
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Who exactly outsourced production? You should take the time to answer that question. You might learn something.
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The issue is that we don't want the free market outcome (overseas production) because it runs contrary to our national security.
The issue is that the general public isn't interested in paying for domestic production. Not just for chips, practically for anything. There's a reason that companies moved production overseas, and it's not mainly profit. It's because the public is no longer willing to pay ANY extra to ensure that domestic manufacturing is healthy in the US. This isn't new - it started decades ago. John Q. Public would rather buy 5 $2 t-shirts made overseas than 1 $10 t-shirt made in the US.
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John Q. Public would rather buy 5 $2 t-shirts made overseas than 1 $10 t-shirt made in the US.
Perhaps, though it's not always a simple price issue. The US shirt (in this example) may not be of sufficiently better quality, material or construction, to justify the much higher price and/or the lower price shirts may be of sufficient quality for the intended purpose.
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John Q. Public would rather buy 5 $2 t-shirts made overseas than 1 $10 t-shirt made in the US.
Perhaps, though it's not always a simple price issue. The US shirt (in this example) may not be of sufficiently better quality, material or construction, to justify the much higher price and/or the lower price shirts may be of sufficient quality for the intended purpose.
I'm not arguing that, what you say may (and probably is) a part of the equation. My point was that the US consumer is being penny-wise and pound-foolish. If the less expensive goods are what are desired, the side-effect of that is don't expect domestic US manufacturing to be a robust industry. If we want manufacturing here, we have to be willing to pay for it.
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Agreed, though could some of the fault also be on the manufacturing side, with domestic companies not wanting to produce higher-quantity, lower-markup products -- ie "wasting their time" on that? Granted some of that may be due to material production costs out of their control, not just labor/capital costs ... Also, distributors, like Walmart (in particular as they account for 67% of US retail sales) catering to the lowest-cost options (a LOT of non-food items they sell are from China and the like...) to
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Re:Can't read the article (Score:5, Insightful)
And yet, when companies arbitrarily decide to raise prices in the middle of a pandemic, the customers just accept it. Yes, it is arbitrary, you can tell because these companies profits also went up. If they were just raising prices to account for supply chain issues, then the profits would not go up. The extra cost would eat the price increase.
So, no. I don't think your analysis is very deep or insightful. It's easy to blame consumers. But what came first? Your argument says consumers are "no longer willing to pay" but wouldn't the companies have had to actually outsource first? How would the consumers know there was an alternative, lower price before a company offered that lower price? And how do we know the prices are lower? Seems the prices stayed the same, but profits went up, and workers lost their jobs. A higher supply of workers and lower demand means lower pay for the working class.
Hmm, maybe it's the shitty wages that give workers no option but to pay the lowest possible price. Maybe if we all had purchasing power equivalent to what workers were making in the 70s, we could decide to pay a little more to buy American.
Are you, flippy, working class? Do you make the majority of your income from investments, or selling your time?
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Re:Can't read the article (Score:4, Insightful)
What evidence do you have that people buy more nonessential stuff now than in the seventies? The average workers purchasing power has gone way down since then, seems people are buying more necessities now. Also seems like just another way to shift blame from corporations to the consumer. Which is why I asked if you were working class, you seem to be going pretty far to defend the owning class for one who isn't part of it. But now I see that you consider yourself morally superior to the average consumer, as someone who doesn't buy unnecessary crap and is therefore better with their money than most workers.
Most workers can't afford unnecessary crap, it's not an option for them. But good on you for rejecting consumerism and buying US made goods. Now, if we paid more people a living wage, and did not bankrupt them with medical and educational debts, they might have that option too.
So my next guess is that you were born before 1970, and don't really understand the issues facing the younger generations. Have you ever thought to yourself, or said out loud, that the younger generations should spend less on Starbucks or avocado toast?
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How about instead, try convincing corporations that paying workers enough to buy the corporations' products is a good idea. You know, like Ford did, wy back in the day. You think workers went "You know what sounds nice? Paying me less but making credit easy so I can continue to buy crap on loan while making less money!" Sure thing bud. That was the workers' decision. It wasn't pushed on them as the only option by con men with MBAs. Sure.
And the funny thing with people who put forth this argument: they area
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How about instead, try convincing corporations that paying workers enough to buy the corporations' products is a good idea.
Good luck with that. Why should the corporation do that when they're paying the workers like crap and they STILL manage to sell plenty of their products?
There are only 3 things that have ever caused corporations to change their behaviors: 1) customers refusing to buy their products 2) government intervention/regulation 3) bloody revolution. If you think that corporations will change their behavior out of altruism, you're mistaken.
I'll address your allegations against me personally, as well.
Corporations, in
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By "convince" of course I mean compel through law. We can do it. Raising the minimum wage is popular with most citizens.
So your defeatism is just that, and nothing more sinister? Okay. This thread started out with you blaming consumers for not buying American. And even when I responded to someone else, you jumped back in to say "impossible! Can't be done!" one more time. Sometimes, concentrated defeatism is just as bad as active opposition.
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you jumped back in to say "impossible! Can't be done!"
I did nothing of the sort. I enumerated three clear ways that things could change (customers refusing to buy their products, government intervention/regulation, and bloody revolution).
By "convince" of course I mean compel through law.
So you agree with the 2nd of my 3 enumerated ways that things can change.
So your defeatism is just that
If you want to consider someone doing the things that they are capable of (using the power of their wallet, voting, vocal activism, and volunteerism) in spite of the long odds to be "defeatism", I can't stop you from thinking that, but I don't agree with
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Ah, so you're a contrarian. Someone who argues for the sake of it. I can respect that.
Overseas production wasn't the issue (Score:2)
Re: Can't read the article (Score:2)
Will off-shore chip fans be shuttered when the subsidized domestic chip fans come online? (Or are we going to be competing against them?)
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Always funny how private business wants the free markets to work until it's not in their interest.
Like how a former President claimed election fraud in states he narrowly lost, but not in ones he narrowly won?
What is the long term outlook? (Score:2)
Lets say we give the industry all this money, and then in two years demand gets shutdown? This is a knee jerk reaction. Right now the fabs for the suppliers that I use did not have enough raw material on hand so they can't even use the capacity they have.
A better thing would be to force fabs to carry inventory on raw materials, and make consumers pay for it instead of taxpayers.
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The long term outlook is not a supply and demand problem, it's a problem of not having to rely on China* for chips.
* or countries that China think is theirs.
Also, all the fabs are currently located in a small spot on the planet, one small asteroid could send us back to the dark ages**.
**.... of computers, which would be around the 1980's.
Re: What is the long term outlook? (Score:2)
Are you serious? We need to give chip companies BILLIONS of taxpayer dollars because a small asteroid might take out their current chip fabs??
Bad comparison (Score:4, Interesting)
Really? From what I've read so far, chips used in cars are so old that the fabs required to make them are (very) old processes, the only thing you could do with these fabs would be things like Z80 CPUs or something.
I'm kidding and exagerating of course, but only Tesla seems to use cutting-edge chips in their cars. I've heard that their latest models use a custom AMD Ryzen, for example. And Tesla wasn't stupid enough to cancel their orders like the other car makers, which is why they're in trouble now.
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They don't even need to update very far and the increase in integration of later microcontrollers would save them a lot of money.
They would have to do a little engineering - redesign boards and re-qual them. If they can't do that, they shouldn't be building cars.
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Qualification doesn't take years. It takes design effort (to include the testing hooks) and at worst a few weeks spent on environmental and certification testing. The rules of reliable design have not changed and new things can be designed to those rules. Semiconductor manufacturers already take FuSa compliance seriously so the components slot right into the FuSa framework.
If your business is on the line for lack of old parts and you are not designing boards with new parts with highest priority, you're doin
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Now get all your suppliers inline and do the bidding rounds, plus test parts, plus re-certing the parts from the manufacturer that won the bid, then getting approval from all eight layers of management in a company like GM, then update the software, do all the testing and safety certification that it requires...
Three years is quick.
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>Now get all your suppliers inline and do the bidding rounds
This is where the old car manufacturers are screwing up. They can't be bothered to hire their own engineers to do integrated design with the rest of the vehicle.
Re: Bad comparison (Score:2)
The old processes are better for chips that have to be reliable. Sure they could make them reliable with new processes but they would be a lot more complex and that would both cost more and also introduce new opportunities to fuck things up.
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You can build anything you want for automotive using GF FDX nodes. Or Intel 22FFL (not sure if they have an updated version of that node for 14nm or 10nm). You might have to add some kind of a VRM for the chips that won't like the input voltage of current automotive designs, or maybe not.
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Z80s? No, the fabs aren't that old. Most of the processes used in automotive are maybe 10-15 years old. And some of the automakers are updating their chips, like Toyota.
No more subsidies (Score:3)
No more free handouts to mega corporations. If they don't like it then we'll make our own CPUs with taxpayer dollars. The United States government would find a trivial to build its own chip foundries and can use eminent domain and patent law to make anything they want. And if we need to stay ahead on cutting-edge tech we've got the public universities for that and no shortage of graduate students. So if you think I'm joking, try me.
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I agree with your first take. Give the government real stocks that will/can pay dividends and use those dividends to lower the tax burden on *LOWER INCOME* individuals, rather than corporate donor. . . er, overlords.
I have thought that there's no reason for the government to just hand this money straight over to these companies when they're fully capable of making their own chip production facilities. Then rent the suckers out if the big companies whine about competition.
This concept that massive profitab
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I want real voting shares held by the US government in exchange for my taxpayer dollars with my Representatives able to vote on the direction of the company and ensure that my taxpayer dollars are being put to good use using those votes
While I agree that companies shouldn't get free money from taxpayers, I shudder at the idea of having Congress vote on the direction companies should take. Even ignoring the inevitable corruption, pork-barrelling and the fact that most congresscritters are too ignorant to vote on the best way to open a paper bag, having the government direct companies (even simply by owning voting shares) reeks of five year plans, and we've seen how well those worked.
I could perhaps see an independent entity (kind of like t
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That's actually not a horrible idea.
Re: No more subsidies (Score:2)
You really want your elected politicians voting on Chip Fab decisions?
Seriously?
No, I want them to shutter their foreign chip fabs if they want money to build domestic chip fabs.
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What foreign chip fabs?
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The last thing a company needs is 535 members of Congress taking 3 months to quibble over how that board seat will vote on things, and all the parliamentary procedure that entails. "Well, we would have liked to re-approve the corporate equity plan, but it was held up in Senate committee by an absent quorum."
I'm good with the idea of "government funding through stock sale" - put that shit right in the United States Treasury and let any growth and dividends pay back the construction loans with a nice profit
Yes! (Score:3, Funny)
Pelosi, Schumer Urged To Pass Chip-Funding Bill ...
My grocery store is often out of the Jalapeno-flavored ones and, sometimes, pretzels just won't do.
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Subsidies to undo offshoring (Score:2)
Corporate Handouts (Score:4, Insightful)
Fund your own needs and keep your hands off of my stash...
Re: Corporate Handouts (Score:3)
Are we under the impression that banks are unwilling to loan chip manufacturers money to build their chip fabs? Why do they need SUBSIDIES?
Re: Corporate Handouts (Score:2)
Yes, we are. It's easy to get funding for some new shiny shit but for old reliable makes a steady profit industry it's quite difficult. Note how Tesla can lose money and be overvalued while GM or Ford can have a record year and barely move the needle of their stock price if at all. Apparently meeting expectations and making a solid profit doesn't attract investors any more, they all want a massive payoff that you only get if a startup goes stellar or you loot the company and sell the carcass.
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Seriously? If a Fab costs $20BN and the govt gives - literally gives - the chip company $5BN to build the Fab, the chip company still needs to raise the other $15BN, which comes from the banks.
Is there a reason we couldn't authorize loan guarantees instead of subsidies? Loan guarantees only cost money if the chip maker goes bankrupt (Solyndra), but with a govt guarantee the chip maker gets lower interest rates and easier financing.
Works For Everyone (Score:3)
Trying to fix the 90's mistake (Score:3)
The mistake was: after seeing such a lower labor cost, they outsourced 100% of their production. And now that China got us by the balls, we try to pass bills to manufacture things back at home again. Weird thing is; they only focus on the chip of shortage and not on any other manufacturing products. Who's to say after we fix the chip shortage, some other stuff becomes short? We gonna have to pass new bill to fix those shortages too.
Main problem is we shouldn't even have needed to pass a bill to fix a demand shortage. We could have just slowly build more factories at home and other countries besides China to make the stuffs. It's American corporates that want tax exemption, better treatment, cheap rent/land to make it happen at home, despite any profit will go to shareholders' pockets. In the previous century if a company wants to do something, it plans internally and make sure to stay inside boundaries of laws. Now everytime they want to invest in a big project, they come to politicians begging for incentives and the politicians always give it to them. While it makes sense to give it to them in terms of cost vs benefits, it also makes them think tax payers have the duties to give them incentives cuz they create jobs.
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You are imagining that there's nothing but free enterprise involved.
"Governments around the world are subsidizing the construction of semiconductor factories "
https://www.reuters.com/articl... [reuters.com]
It is essential! (Score:2)
It is essential Congress act swiftly to provide us with corporate welfare.
More corporate socialism (Score:4, Insightful)
These companies are raking in billions of dollars in profit each year. If they are that poorly managed that the only way for them to create fabs and related industries in this country is for the taxpayers to pick up the tab, they should be allowed to fail.
If taxpayer money is used then the taxpayers get a share of their profits. If not, let them pay out of their own pocket.
Funding this bill (Score:4, Informative)
Can we fund this by taxing the corporations that shut down [timesunion.com] their US [mercurynews.com] chip manufacturing [arstechnica.com] and sent it overseas [latimes.com]?
But wait...Didn't the Trump administration just cut US corporate tax from 35% to 21% so that corporations could invest their profits here in the US and stop moving overseas? But now suddenly those corporations need the US taxpayers to give them money so that can invest in the US? Folks: sanity has left the building.
Seriously though, this is a solid business plan:
1. Move US manufacturing overseas.
2. Profit!
3. Threaten to move more overseas if you don't get a tax cut.
4. Profit!
5. Wait for supply issues.
6. Demand money to bring manufacturing back.
7. Profit!
(In fairness, I picked one company but they aren't the only ones at fault here)
P.S. The Bloomberg article recommends I read "Intel CEO Is Tired of Wall Street Doubting His Comeback Plan" -- Well now we know the comeback plan!
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If you dont own equities, you’re basically only participating in half of capitalism. The half that gets shafted on a regular basis.
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Yes, it does seem like Intel made a few bad decisions and they are a bit behind TSMC as well. However, they are not nearly as far behind as a lot of people think. TSMC marketed their fab technologies really well by naming things "9nm" then "6 nm" then "3nm", while Intel stuck with names like "10nm plus". I'm getting the details wrong, but the current names make it sound like TSMC devic
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Even if Intel isn't perfect...Maybe a few billion bucks to ensure our chip supplies is a reasonable use of tax dollars.
I *begrudgingly* agree. The US does need this manufacturing. But I want some blood out of it! And I want the root cause fixed. We can't continue this cycle of moving industries overseas, then begging for government money to bring it back. It isn't good for our economy.
Regarding some more technical points:
"9nm" then "6nm" then "3nm" ... When you actually compare them, the size difference is barely noticeable.
You are right that TSMC had better marketing, but the manufacturing difference is quite significant. Enough so that Intel is even using TSMC to manufacture Intel's most power-efficient chips. The rea
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Let's make them a deal - if they want a government bailout to fund building multi-billion dollar fabs that they can build themselves, then they get to pay the previous tax rates. Forever.
What is it Republicans say.. (Score:4, Insightful)
..when it is people (instead of big businesses) who are asking for a handout?
Get a job and stop being a mooch.
Yeah, chip companies. Get a job. Maybe you can do Uber Eats on the side until you have enough saved up to build that chip fab. Stop whining that the unfavorable economic conditions are working against your ambitions, or that earlier companies had an easier go of things years ago. Pull on those boot straps and make your own success.
Re: What is it Republicans say.. (Score:2)
I thought it was the Democrat mantra that displaced workers (coal miners, etc) "Learn to Code" [nymag.com] ?
Subsidy? (Score:2)
Congress in 2021 authorized federal spending on research and design initiatives to boost domestic chip production and create a subsidy for domestic manufacturers.
So we are going to simply hand taxpayer funds to 'chip companies' to build Chip Fabs in America?
What am I missing?
Chip makers have a ready-market for every chip they can produce, why do they need a subsidy?
Will a subsidy make the Fabs come online faster than a self-funded Fab?
Will a subsidy make the chips cheaper for Americans (which helped finance/underwrite the Fabs)?
Will Chip makers shutter off-shore chip fabs when the subsidized domestic chip fabs come online?
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Different fabs (Score:2)
Only if it includes (Score:1)
And then there will be many screwed companies. (Score:2)
The companies facing the biggest and most devastating semiconductor shortages need long term support for fab processes. That means 90, 65, 45, 22nm node processes. When Trump and Biden blocked SMIC which were capable of mass producing on these node processes, they cut off all the American
Does this bill require
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I don't think SMIC was ever a major player in automotive IC production though. At least not for American companies.
Keep your eye on the ball (Score:2)
Based on the comments here, it's clear that people are perhaps getting distracted from the actual issues at hand. This is a long read, but it needs to be said.
Currently, if you combine all the fab capacity from every silicon foundry in the entire world, you get: not enough ICs to keep everyone happy. The automotive industry is being hit particularly hard because:
they generally rely on older (10+ year old) foundry processes that some foundries are eagre to mothball
during 2020, many automotive manufacturers
Corporate welfare (Score:1)
So (Score:1)
So Pelosi is buying Intel shares now?, is this because the Government is going to open their wallet and give fat corp some money?