The US CHIPS Act: Why Intel Supports It

[btarunr]

As the world comes to grips with chip shortages due to supply chain disruptions and ripple-effects from the global pandemic, Intel's leaders are urging Congress to fund the CHIPS for America Act to create a more stable future for the U.S. tech industry.

In 1990, 80% of the world's semiconductors were produced in the U.S. and Europe. Today, 80% are produced in Asia, where countries provide substantial incentives to domestic semiconductor industries. This helps create a 30% to 50% cost disadvantage for companies that produce semiconductors in the U.S.
Increasing manufacturing in both the U.S. and the European Union is key to helping rebalance the global supply of chips. In February, EU President Ursula von der Leyen announced the European Chips Act, with the goal of doubling the EU's global semiconductor manufacturing share to 20% by 2030. It also provides for more R&D investments in disruptive technologies, supports small business and startups by attracting new talent to Europe for them, and focuses on building partnerships with like-minded countries to strengthen interdependencies.



The CHIPS for America Act became law in January. In March, the Senate passed $52 billion in funding for those programs in a strong bipartisan vote. The funding still needs to be approved by the House of Representatives.

"Time is of the essence," said Intel CEO Pat Gelsinger during a March hearing in Washington, D.C.

American businesses in every sector across the economy are facing a semiconductor shortage, he added, "and the only way to alleviate the current supply-demand imbalance long term is to increase manufacturing capacity by funding and implementing the CHIPS Act."

Our economic security, Gelsinger said, depends on reliable, resilient access to semiconductors.

View at TechPowerUp Main Site

 

[AnarchoPrimitiv]

Of course Intel supports corporate handouts that will have absolutely no oversight and will probably be used for stock buy backs or executive bonuses... If that money HAS to go to a corporation, I'd rather see it go to TSMC or a company that would benefit multiple other companies... Heck Intel is buying up all the 3nm capacity to spite AMD so its not like Intel isn't a customer of TSMC too

 

[dj-electric]

Of course Intel supports corporate handouts that will have absolutely no oversight and will probably be used for stock buy backs or executive bonuses... If that money HAS to go to a corporation, I'd rather see it go to TSMC or a company that would benefit multiple other companies... Heck Intel is buying up all the 3nm capacity to spite AMD so its not like Intel isn't a customer of TSMC too

You might wanna get updated with the CHIPS act coverage, or Intel's own IDM 2.0 plan for opening up facilities to outside clients.

 

[ThrashZone]

Hi,
Yep dream a little dream
When people rediscover high prices all this will be back in asia where it and many other manufactures were encouraged to move to.
Cycle repeats with same results except now intel wants taxpayer payoffs instead of US tax breaks to move
Wait we already have high prices from the basic concept supply and demand

 

[Space Lynx]

Of course Intel supports corporate handouts that will have absolutely no oversight and will probably be used for stock buy backs or executive bonuses... If that money HAS to go to a corporation, I'd rather see it go to TSMC or a company that would benefit multiple other companies... Heck Intel is buying up all the 3nm capacity to spite AMD so its not like Intel isn't a customer of TSMC too

USA has no choice but to support Intel, when China is using this kind of rhetoric:

Economist says China must seize TSMC if the US tightens sanctions

Bloomberg reports that Chen Wenling, chief economist at the government-run China Center for International Economic Exchanges, said, "If the US and the West impose destructive sanctions on...

www.techspot.com

 

[Unter_Dog]

= $$$$

 

[Bomby569]

The world is getting smaller and smaller, and everybody loses. I guess this subsidies are the price to pay for all the madness in the world.

Anyway for the EU part, i guess only caring about the car industry did had it's disavantages. We would never allow 80% of cars being made in Asia. Priorities.

USA has no choice but to support Intel, when China is using this kind of rhetoric:

Economist says China must seize TSMC if the US tightens sanctions

Bloomberg reports that Chen Wenling, chief economist at the government-run China Center for International Economic Exchanges, said, "If the US and the West impose destructive sanctions on...

www.techspot.com

The China thing is a self fulfilling prophecy. They would never invade as long as we were interconected and dependent on each other. Now we keep increasing the distance between them and us, and it's obvious that the least they have to lose the more they will have a bigger tendency to finally invade Taiwan, to do even worst inside their own country.

But there is a lot to be gained by these divides, lots of money as we see every day.

 

[windwhirl]

Of course Intel supports corporate handouts that will have absolutely no oversight and will probably be used for stock buy backs or executive bonuses

... The government funding R&D is fine and all. Just add a little bullet point in the law saying "company that receives this funding can not give money to stock holders for X years." After all, if you need the gov funding, you shouldn't be investing anything less than the entirety of the company's earnings into said R&D.

 

[Bomby569]

... The government funding R&D is fine and all. Just add a little bullet point in the law saying "company that receives this funding can not give money to stock holders for X years." After all, if you need the gov funding, you shouldn't be investing anything less than the entirety of the company's earnings into said R&D.

No company would ever accept that.

 

[windwhirl]

No company would ever accept that.

Then they shouldn't get funding /shrug

 

[R0H1T]

This will only end one way ~ more executive bonuses at Intel & of course stock buybacks

 

[Dr_b_]

China was and is a bad actor, this has nothing to do with modern US foreign policy (Tianamen, NK, decades of industrial espionage, persistent and real threats to Taiwan, militarization of SC Sea), and the problems still exist now with his successor and are getting worse. The solution, after decades of integration which failed to result in better relations, is to disconnect, not double down on interdependence, or rather, our dependence on them. I know that its easy to blame foreign policy on everything, but its not a direct cause or even a proximate cause of the complex issues regarding China.

 

[R0H1T]

Yeah except no one's disconnecting from China, not unless you're willing to pay $500 more for your iPhone or ~600USD more for that 3090Ti

Capitalism is great isn't it

 

[Bomby569]

China was and is a bad actor, this has nothing to do with modern US foreign policy (Tianamen, NK, decades of industrial espionage, persistent and real threats to Taiwan, militarization of SC Sea), and the problems still exist now with his successor and are getting worse. The solution, after decades of integration which failed to result in better relations, is to disconnect, not double down on interdependence, or rather, our dependence on them. I know that its easy to blame foreign policy on everything, but its not a direct cause or even a proximate cause of the complex issues regarding China.

Let's not do offtopic, but things will not become better by isolating them, it will only get worst. It's my firm believe.

 

[mechtech]

Today, 80% are produced in Asia, where countries provide substantial incentives to domestic semiconductor industries. This helps create a 30% to 50% cost disadvantage for companies that produce semiconductors in the U.S.

Hmmm. During peak graphics card prices you probably could have made them in. Germany with unionized labour cheaper than what they were selling for. I think the execs remuneration doesn’t help pricing either.

 

[R0H1T]

This helps create a 30% to 50% cost disadvantage for companies that produce semiconductors in the U.S.

What about those greedy trillion dollar corporations? Why don't they hire more in the West or pay more taxes? It's easy blaming the tax incentives from other countries when you know full well the reason behind them!

 

[Bomby569]

Today, 80% are produced in Asia, where countries provide substantial incentives to domestic semiconductor industries. This helps create a 30% to 50% cost disadvantage for companies that produce semiconductors in the U.S.

Hmmm. During peak graphics card prices you probably could have made them in. Germany with unionized labour cheaper than what they were selling for. I think the execs remuneration doesn’t help pricing either.

If your claiming we could just made everything in the West and we would just pay the difference, wouldn't that create a problem of inflation?
Don't underestimate the difference in prices of everything if we just shifted all the production to the West. Most of the things would could 5 times as much and more.

 

[phanbuey]

If your claiming we could just made everything in the West and we would just pay the difference, wouldn't that create a problem of inflation?
Don't underestimate the difference in prices of everything if we just shifted all the production to the West. Most of the things would could 5 times as much and more.

That would be great.

What Is Minimalism? - The Minimalists

We could use less crap and more manufacturing jobs.

 

[R-T-B]

China was and is a bad actor, this has nothing to do with modern US foreign policy (Tianamen, NK, decades of industrial espionage, persistent and real threats to Taiwan, militarization of SC Sea), and the problems still exist now with his successor and are getting worse. The solution, after decades of integration which failed to result in better relations, is to disconnect, not double down on interdependence, or rather, our dependence on them. I know that its easy to blame foreign policy on everything, but its not a direct cause or even a proximate cause of the complex issues regarding China.

I agree with the premise ("China was and is a bad actor") but find the isolation take not something I can agree with.

 

[Bomby569]

That would be great.

What Is Minimalism? - The Minimalists

We could use less crap and more manufacturing jobs.

They make crap because we buy crap. They also make much of what we use everyday.
I've worked with them in the past you could order from the same company a top product or a shitty product, it was our choice. You get what you pay for.
Not to mention that much of the crap is ordered specificaly by us to be crap and cheap.

 

[mechtech]

If your claiming we could just made everything in the West and we would just pay the difference, wouldn't that create a problem of inflation?
Don't underestimate the difference in prices of everything if we just shifted all the production to the West. Most of the things would could 5 times as much and more.

I was saying we could have made gpus cheaper than their mining pricing peaks easily.

as for other things yes we could easily make them here for not much difference in prices if corps weren’t so greedy and kept wanting greater and greater Record Profits each quarter. There are things made domestically that are not much more than “overseas “ made stuff. But yes some things are 5x more.

examples.
brake rotors I used to buy made in Canada and USA. Now “overseas “. I still pay the same price for them!!

I used to buy “roots” jogging pants made in Canada now made over seas and still pay same price.

many savings corps make. They don’t pass along to the consumer anymore.

also expanding further most factory jobs paid 3x more than min wage so if cost of items was 3x but your wage was 3x it’s a wash. Remember before the Cold War ended most things we bought were made in Japan Europe and North America.

 

[Bomby569]

I was saying we could have made gpus cheaper than their mining pricing peaks easily.

as for other things yes we could easily make them here for not much difference in prices if corps weren’t so greedy and kept wanting greater and greater Record Profits each quarter. There are things made domestically that are not much more than “overseas “ made stuff. But yes some things are 5x more.

examples.
brake rotors I used to buy made in Canada and USA. Now “overseas “. I still pay the same price for them!!

I used to buy “roots” jogging pants made in Canada now made over seas and still pay same price.

many savings corps make. They don’t pass along to the consumer anymore.

also expanding further most factory jobs paid 3x more than min wage so if cost of items was 3x but your wage was 3x it’s a wash. Remember before the Cold War ended most things we bought were made in Japan Europe and North America.

Oh that is true, when we shift an order or a factory to China or Indonesia is not thinking about the customer, is to get either more profit margin or to be able to compete with someone else that produces better or cheaper, in the west or that already moved things to China or any combination of these factors.
But as a "happy by-product" you do end up getting things cheaper, it depends a lot on the product, how intensively it uses people, human labor

Apple could easily make less profit and make things in the US (maybe not NY idk, but there cheaper places in the US, Alabama, idk, i know income varies a lot in the US), maybe not all of it, but most of it. And the price would probably be the same.

 

[the54thvoid]

I've edited a few posts on political opinion. Fact is, and as has been posted, there has been a long term slide away from cohesion between the West and China. It is not one politician's fault and whether or not any single person has made it worse isn't relevant to the point that it is vital to ensure global suppliers are not threatened by geo-political threats.

Please avoid partisan politics.

 

[Franzen4Real]

They make crap because we buy crap. They also make much of what we use everyday.
I've worked with them in the past you could order from the same company a top product or a shitty product, it was our choice. You get what you pay for.
Not to mention that much of the crap is ordered specificaly by us to be crap and cheap.

Exactly, the Chinese are fabricating a product to meet a specific spec provided by the company that outsourced the fabrication to them. If they do not meet the specs then the company is not going to place the order with them. They can and do make very high end products when the spec and the budget allow, but at that point in most situations you may be losing any cost benefit of outsourcing in the first place.

 

[ARF]

In 1990, 80% of the world's semiconductors were produced in the U.S. and Europe. Today, 80% are produced in Asia, where countries provide substantial incentives to domestic semiconductor industries.

This is the greatest western mistake ever. It should have kept the production in Europe, and/or move it to the Eastern European regions. And to Africa.

But now, it is already too late. There is a very wide and strong coalition of countries in BRICS, SCO, EAEU and CSTO which comprises around 130 countries in the world, including some very powerful states China, India, Russian Federation, Brasil, Mexico, South African Republic, the African Union, etc.

Empires rise and fall, it is time for a new world order.