Before we talk about the “How”, we need to first understand why we need to revive the semiconductor manufacturing in the US.
First of all, it is the foundation of a modern digitized society. If we accept that our society is heading to a digital one where almost all things will depend on information technology, then we as a nation need to secure the supply chain that provide such IT infrastructure. Semiconductor chips are at the core of IT. Therefore the US needs to have the manufacturing capability, and capacity, to produce semiconductor chips.
Now back to the how – How to revive our manufacturing prowess in this industry?
The main hurdles are, in my opinion, two. The first is its large capital expenditure. It now costs tens of billions of dollars and multiple years to build a fab, and yet with just a few years of usable life, it constitutes a huge financial risk for any private company.
True, companies such as Intel has made such commitments before and even now, but the competition landscape has change dramatically, and that is my second hurdle to US semiconductor manufacturing. Specifically, consumer electronics giants such as Apple and Nvidia have chosen to outsource their semiconductor manufacturing overseas, and fostered the rise of TSMC, the world’s largest semiconductor manufacturer based in Taiwan. This video explains pretty well:
So what should do? My take is simple: government investment. The US government should invest in US chip manufacturers (such as Intel) in order to spur the innovation and competitiveness of the sector.
Just look at the TSMC as an example. Itself was spawned out of the Taiwan government’s brilliant vision to upgrade its industry and its commitment to invest up to 50% of any capital requirements.
So why can’t we learn from our competitor and do something like that?
To be sure, government subsidy is not a cure-all. In fact, it is risky too. Taiwan government put money into not just TSMC but also several others, but only TSMC thrived. But we American companies have the best talent, and best capitalist market, and the best entrepreneurial leaders. With some help to kickstart the “Build Back” for the US semiconductor manufacturing industry, it is with very high probability that we will have a strong US semiconductor manufacturing base in a few years.