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President Biden’s announcement Wednesday that he will give Intel $8.5 billion in federal grants to make the world’s most advanced computer chips comes after Dwight D. Eisenhower used federal funds to build the nation’s highway system. It is one of the most remarkable experiments in American industrial policy since its construction.
But there is a significant risk that America’s efforts to invent itself and restore its largely lost technological capabilities may not be a new beginning, but rather the culmination of the effort.
When the CHIPS and Science Act was passed two years ago, it was promoted as a kind of down payment on a long-term investment in an important sector of the economy that made Taiwan the world’s dominant player in chip manufacturing. It’s a strategy China began emulating nearly a decade ago, pumping new money into chips, high-capacity batteries, quantum computing and artificial intelligence every year, to name just a few.
But while Mr. Biden celebrated the Intel plant as a turning point in America’s industrial and national security strategy, there is no immediate prospect of follow-up plans. And Congress has quietly carved out billions of dollars authorized for research, training, and production that were never fully allocated.
That’s why Mr. Biden wants to see the immediate benefits of his investment in Intel: 10,000 manufacturing jobs in Arizona, New Mexico, Oregon, and Ohio, and 20,000 construction jobs to get things off the ground. The government says it will create jobs in the industry, but many in the administration are privately worried that their strategy won’t survive the situation. A moment of political polarization.
What Biden and Commerce Secretary Gina Raimondo haven’t said much about is the scale of additional government investment that might be needed if they get serious about boosting investment in everything from the most expensive semiconductor factories to automakers. It’s for this reason. Emission regulations must be met.
“President Biden believes this legislation is a “turning point” and that the federal government will be able to address high tech’s most difficult problems,” said Doug Kalidas, a research fellow at Harvard University’s Belfer Center for Science and International Affairs. “He often talked about this as a new role for investing.” Senior Vice President of Americans for Responsible Innovation, an advocacy group for emerging technologies, particularly artificial intelligence.
A hint of that concern came in comments from Intel CEO Patrick Gelsinger to reporters Tuesday night.
“Three- to five-year programs alone are not the answer,” Gelsinger said. “I think we’ll need at least his CHIPS 2 to complete the job.”
It was an optimistic assessment. Many industry participants believe that federal investments need to be iterated as technological challenges change, along with an assessment of which technologies are too important for the United States to rely on foreign supply chains. It says that there are. Past efforts to shore up the chip industry with one- or two-shot investments, when Japan was a major competitor, failed spectacularly.
The passage of the CHIPS Act of 2022 was the result of a confluence of extraordinary events. Nowhere has it been more clear than during the coronavirus pandemic how fragile supplies of critical goods are, from surgical masks to vaccine precursors to common chips needed to make cars and washing machines. It was a discovery. In addition, there were growing concerns that Chinese power would disrupt the U.S. economy and threaten Taiwan, where more than 90 percent of the world’s most complex and advanced semiconductors are manufactured.
Raimondo and Director of National Intelligence Avril D. Haines told senators in the weeks before the bill was passed about the glaring vulnerabilities in the U.S. defense industrial base and how blocking certain technologies could lead to missile attacks. He explained how it would be possible to deploy the aircraft on the ground and produce fighter jets. Stop. Concerns about the rise of a manipulative China that could hold Taiwan’s semiconductor production center hostage brought together enough Republicans to have a truly bipartisan majority. The bill passed 64-33 in the Senate.
Still, there were some who had doubts. Morris Chan, an MIT-educated engineer who left Texas Instruments to found Taiwan Semiconductor Manufacturing Company, argued that money alone is not enough to recreate the magic he created. He called the billions of dollars in subsidies “a very expensive waste.”
The crux of Mr. Chan’s criticism is that even if Intel imitates Taiwan Semiconductor’s core strategy and becomes a “foundry” producing chips designed by Apple, Nvidia, and others, American engineers will not be needed. He argued that he would not spend grueling hours or pursue perfectionism. To be successful.
However, there were other criticisms from advocates of industrial policy. Biden’s efforts to bring manufacturing home were too slow, and the bill was too small to spur the private investment needed to bring about a true manufacturing renaissance. .
Politics in an election year is even more difficult.
Former President Donald J. Trump has regularly launched attacks on another form of industrial policy: incentives to buy electric vehicles, a key part of Mr. Biden’s climate plan.
The cars were the subject of criticism at Trump’s campaign rallies. He claimed without evidence that electric vehicles would “kill” the U.S. auto industry and said the Biden administration would “build Michigan’s manufacturing industry by attracting electric vehicle buyers through tax breaks and other subsidies.” “I ordered that a blow be struck,” he said.
However, even Mr. Biden seems somewhat hesitant to fully support his own policies. His original CHIPS Act authorized the United States to spend $35 billion on science and innovation research through government agencies in 2025. Biden’s budget request announced last week is nearly $20 billion.
“The rhetoric is much more impressive than the budget numbers,” Kalidas said.
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