The CHIPS Act: Made in The US, again

Every year we become more dependent on Advancedcomputer chips for all kinds of things in all kinds of ways about 90 percent of them are madein East Asia which is why when the pandemic disrupted the supply chain we all felt thepain but the United States has embarked on an urgent mission to change that David Poguetells us about the players and the stakes you probably realize that there arecomputer chips in your computer and in your phone but you may not realize just how many otherthings in your life rely on chips like your clocks and your speakers and your toys.

Thank you and every single thing in your kitchen actually trust me on that one our demand for silicon chips is only going to growas we find new ways to make new devices smarter Chris Miller teaches at Tufts University'sFletcher school and is the author of a book about the chip industry published by our sister companySimon & Schuster and so here's the big one where is the chip industry most of the manufacturinghappens in East Asia and Taiwan manufactures 90 percent of the world's most advanced processorsit's true over the last 30 years the world has put almost all of its silicon eggs into one baskettogether we Define the future a single company called TSMC the Taiwan Semiconductor ManufacturingCompany it's now the world's biggest chip maker.

Doesn't that mean our entire economy is a SittingDuck well it's a it's an extraordinary risk we learned that the hard way during the pandemic aspeople started working from home they bought new PCs companies started upgrading their data centerinfrastructure and Chip companies struggled to keep up a limited supply of sedans and SUVs isdriving prices Sky High the reason was the chip shortage a typical car contains hundreds of chipsjust a single delayed component could cause a car to sit in the factory floor unfinished for weeksor even months as they waited for the chips they needed but pandemics aren't the only threat toour chip Supply the biggest risk is geopolitics is tensions between China and Taiwan escalatethere's more and more concern that China could try to disrupt chip supplies out of Taiwan byblockading the island or even attacking the.

Economic impact would be felt over many yearsand the cost we've measured in the trillions of dollars since the '90s America's share ofglobal chip making has dropped from 37 percent to 12 percent today American companies like appleAMD nVidia and Qualcomm design their own chips but they all hire tsmc to make them tsmc even makessome of the chips for Intel the American company that pioneered the semiconductor the number onedriver was government policies Al Thompson runs government Affairs for Intel he says that the EastAsian chip industry flourished thanks to financial help from their governments it really providedan attractive incentive for for comp companies to do more Manufacturing in in East Asia so nowwe're in a pickle pandemics natural disasters or geopolitics could disrupt our supply of chips atany time why doesn't our government do something.

Well the future of the chip entry is going to bemade in America the chips Act is a law developed by the Trump Administration and signed into law byPresident Biden last August and I would dare you to find an issue that had the support from twodifferent presidential administrations and two congresses that passed with bipartisan marginsthe chips act could be a huge deal for America both for our economy and for our national securityit includes 13 billion dollars for research and development 39 billion dollars for building newplants and about 24 billion dollars in tax credits to attract private investors as Intel CEO Patgelsinger puts it this is the most significant piece of industrial policy legislation since WorldWar II if it works this act will spark an American ship making boom in massive fabricationplants called Fabs like the two that Intel.

Is building in Arizona totaling 650 000 squarefeet now to just put that in perspective that's like six large you know football fields KeyvanEsfarjani is Intel's Global operations director so how much does it cost per Fab it's a littleover 20 billion dollars is it accurate to say that some of that money came from the chips actwell welcome that's absolutely our expectation okay okay there you go one reason Fabs areso expensive they contain some of the most sophisticated equipment on Earth I have to sayI've never felt more dust proof the air here is a thousand times cleaner than a surgical rooman eyelash a speck of dust or even the wrong color light could ruin these delicate siliconWafers they basically get cut up and then you put them on a chip and then you send them tocustomers all around the world the smaller you.

Etch the circuitry the faster the chip thereare billions of transistors into each one of these chips hundreds of billions oftransistors how thin are those layers oh they're at the angstrom levels right like atomsthat's right at the atom level the people who work on these they must get terrible eye strain nowthe chips act isn't popular with everyone one reason is the fine print for example to receivethe government's money a Semiconductor Company must promise to pay its employees a market wageand offer child care you have to turn your company into a social welfare operation you have to jointhis Brave New World whether you like it or not but Intel's Keyvan Esfarjani says that techcompanies have to offer good pay in child care anyway if they want to attract Talent none of thisbothers Us in fact if anything it's very aligned.

To how we operate we want to create an environmentthat it is very enticing where we are going to grow the talent for author Chris Miller the biggerconcern is that 52 billion dollars won't be enough I think the chips Act is a important turning pointbut it's on its own it's not going to be enough to revolutionize the chip industry or to dramaticallyreduce our dependence on ships manufactured in Taiwan but no matter what the critics sayand American Fab building boom is underway Intel Has Broken Ground on what could eventuallybe eight immense factories on 2 000 acres in Ohio in fact with the prospect of Grants from the chipsact 14 companies have either announced or Broken Ground on 22 new chip factories in Americaincluding two more in Arizona being built by our old friends from Taiwan tsmc altogetherthat's 160 billion dollars of spending and 28.

000 new American jobs not even counting theboom and suppliers housing and infrastructure around each plant we have a really amazingopportunity as a country to basically regain that manufacturing share in partnership with theUS government in a way we've never seen before

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