Joe Biden

ICYMI: "The Great American Innovation Engine Is Firing Again"

May 11, 2024

This weekend, Americans are reading about how President Biden's CHIPS and Science Act has catapulted the U.S. tech manufacturing ecosystem forward and restored America's leadership in critical industries of the future. Less than two years after President Biden signed the bill into law, companies like TSMC, Intel, and Microsoft are building semiconductor fabs and data centers on American soil that will employ thousands of hard-working, middle-class Americans. According to Financial Times, "The US has both the intent and the capability to reassert global technological leadership." Shoring up American supply chains, driving American competitiveness, and creating job opportunities in communities across the country — the President's economic agenda is delivering for American workers and businesses.

See below for some weekend reading:

Financial Times: The great American innovation engine is firing again
[John Thornhill, 5/9/24]

Once again, the US federal government is back in the game of funding technology in a big way, promising to unleash a further wave of private sector investment and innovation.

The US has both the intent and the capability to reassert global technological leadership, while hobbling China's rise. And Silicon Valley is likely to be among the biggest beneficiaries of that political ambition, even if some of its leading luminaries do not yet appreciate it. The rest of the world might have fondly hoped it would one day overtake the US in several strategic sectors, but other nations look more like the yapping dog failing to catch the car.

This week, the Semiconductor Industry Association published a report highlighting how the adoption of the Chips Act in 2022, which provided $39bn of grant incentives to support the semiconductor industry, had primed a torrent of private sector investment. An additional $447bn of investment has since been announced in 83 separate projects across 25 states. The report forecasts that the US will now increase its share of global manufacturing capacity for leading edge chips (below 10 nanometres) to 28 per cent of the total by 2032 from 0 per cent today.

Just as the Sputnik moment of 1957, after the Soviet Union's launch of the first satellite, triggered a surge of technological investment in the US, so the current superpower rivalry with China has similarly loosened federal spending in the tech sector. Washington finally realized that its reliance on chip imports from Taiwan and South Korea was an unacceptable strategic vulnerability in a more volatile world.

"The idea that 75 to 85 per cent of our chips were being made in east Asia was unsustainable," John Neuffer, the president of the Semiconductor Industry Association, tells me. "We are spreading the peanut butter more broadly."

However, the federal government's ambitions extend beyond semiconductors. The Inflation Reduction Act, also passed in 2022, is stimulating a significant wave of investment in climate tech. And the Biden administration aims to bolster US strengths in the biotech and quantum sectors, too. It recognises that the US has previously failed to capitalise on its early technological lead in some critical areas — telecommunications infrastructure equipment and batteries, for example — and does not want to repeat that mistake. […]

[A]s the legendary investor Warren Buffett preaches: "Never bet against America."

The New York Times: Billions in Chips Grants Are Expected to Fuel Industry Growth, Report Finds
[Madeleine Ngo, 5/8/24]

The United States will triple its domestic chip manufacturing capacity by 2032, the largest increase in the world, according to a report released on Wednesday by the Semiconductor Industry Association and the Boston Consulting Group. As a result, America's share of world chip manufacturing is expected to rise for the first time in decades, to 14 percent by 2032, up from about 10 percent today.

The report found that much of the industry's growth would be fueled by the bipartisan CHIPS Act, which gave the Commerce Department $39 billion to encourage semiconductor manufacturing in the United States. Absent that legislation, America's share of global chip manufacturing would have fallen to 8 percent by 2032, according to the report.

The United States is also expected to see a substantial boost in the domestic production of advanced logic chips, which are used in artificial intelligence, smartphones and autonomous vehicles. Bolstering the production of the most advanced semiconductors has been a central goal for the Biden administration. Federal officials contend that in order for the country to lead in major technological industries, it will need to have a more reliable supply of the most advanced semiconductors. […]

Chris Miller, author of the book "Chip War" and a professor at Tufts University, said the report showed there was "real evidence" that the incentives included in the CHIPS Act were "changing businesses' investment decisions." He added that the projected increase in America's production of advanced chips would also be a substantial change.

Bloomberg: US to Triple Chipmaking Capacity by 2032, Industry Group Says
[Mackenzie Hawkins and Ian King, 5/8/24]

US chip production is poised to explode in coming years, helping ease a risky dependency on East Asia, according to a projection by the Semiconductor Industry Association.

Semiconductor manufacturing capacity in the country will triple by 2032, an SIA-commissioned study by the Boston Consulting Group found. That will take the US share of the industry to 14%, up from 10% currently, according to the report, which was released Wednesday.

The surge will reverse a downward trend for domestic chip production, which had been decamping for Asia in recent decades. Were it not for government funding programs like the 2022 Chips and Science Act, the US share was on course to shrink to 8%, the study found. […]

The Chips Act set aside $39 billion in grants — plus $75 billion in loans and loan guarantees, and 25% tax credits — to persuade semiconductor firms to build factories on American soil. In the wake of that legislation, the US has secured commitments from all five of the world's top chipmakers to add facilities in the country. That includes the three main manufacturers of cutting-edge logic chips, the components that serve as the brains of devices: Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co. and Intel Corp.

Joseph R. Biden, ICYMI: "The Great American Innovation Engine Is Firing Again" Online by Gerhard Peters and John T. Woolley, The American Presidency Project

Filed Under


Simple Search of Our Archives