In a groundbreaking announcement earlier this month, President Donald Trump and CC Wei, the chief executive of Taiwan Semiconductor Manufacturing Company (TSMC), revealed a monumental $100 billion investment at the chip fabrication site in Arizona. This investment, coupled with an existing $65 billion commitment, cements TSMC’s position as the leading manufacturer of semiconductors globally, particularly in the realm of advanced logic chips. Not only does this plan signify a significant victory for US national security, but it also underscores the invaluable impact of the US Chips Act in fostering such crucial investments.
However, amidst the celebrations of this monumental achievement, some members of the current administration have raised doubts about the effectiveness of the US Chips Act. They argue that tariffs alone are sufficient to revitalize US semiconductor manufacturing, dismissing the bipartisan efforts behind the Act as a partisan endeavor of the Biden era. As someone who has served as the director of the Chips Program Office at the Department of Commerce, I am compelled to set the record straight.
- Building a Strategy:
- Semiconductors are the bedrock of modern computing, woven into the fabric of our daily lives, from cutting-edge technologies to everyday devices. Despite this, the US had seen a drastic decline in its share of global semiconductor manufacturing, plummeting from nearly 40% in 1990 to a mere 10%. Critical areas like leading-edge manufacturing had ground to a halt, rendering our supply chains alarmingly reliant on concentrated production in Taiwan.
- The Birth of the Chips Act:
- Recognizing this alarming trend, officials and lawmakers during the first Trump administration embarked on a mission to boost US semiconductor manufacturing. Led by the vision of fortifying the backbone of our technological advancements, discussions culminated in the creation of the Chips Act. This act provided monumental support in the form of $39 billion in grant funding and a 25% investment tax credit to jumpstart semiconductor manufacturing in the US.
- A Wave of Investment:
- Since the inception of the Chips Act, the US has witnessed an unprecedented surge in electronics manufacturing investments—more than the cumulative investments in the past three decades. Notably, semiconductor giants like Intel, Micron, Samsung, SK Hynix, and TSMC have all committed to building and expanding their operations in the US. This influx of investment, totaling over $500 billion, is a testament to the success of the Chips Act and the newfound vibrancy in US semiconductor manufacturing.
As we bask in the glow of monumental achievements like TSMC’s commitment to invest billions in the US, it is imperative to acknowledge the pivotal role played by the Chips Act in this resurgence. Undermining this act now would be akin to rolling back the progress made and handing an unwarranted advantage to competitors like China. Let us heed the words of Senator Todd Young, who hailed the Chips Act as “one of the greatest successes of our time,” and continue the tradition of bipartisan cooperation to safeguard our national security priorities. The Chips Act should not be consigned to the annals of history but upheld as a beacon lighting the path to a secure and prosperous future.
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