keep your eye on this legislation...excerpt from the NYT report...
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Senator Rob Portman, an Ohio Republican who helped write the Senate bill, has acknowledged that it runs counter to the free-market philosophy he usually prefers. But, Portman explained at the Aspen Ideas Festival last month, “if we are continuing with blinders on to follow a political philosophy that seems to make sense generally but doesn’t work in the practical world, I think we end up with a much less competitive economy and a national security risk.”
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IMO, this is an example of what's called "Prudential Judgement"...it would be preferable to insist on "Free Market Dogma", but when circumstances are such that an even greater threat (i.e. National Security) would arise, you adapt.
Link: https://www.nytimes.com/2022/07/14/briefing/semiconductor-bill-congress-biden.html
Semiconductor Factories (called Fabs) are highly capital intensive and become obsolete after just a few years. Countries that provide tax incentives can really swing the decision of where to locate them. (Even within the US states/counties that offer property tax incentives are important.)
Also, historically these Fabs were not particularly environmentally friendly with the amount of water used and NOx emissions, but that is getting better. (One of the reasons there have been no new Fabs in California for decades, but instead are in Arizona, New Mexico, Oregon, New York, etc.)
Intel was historically Union averse, so I was surprised to see them pick Ohio for two new Fabs.
This offshore trend started 20 years ago with the decisions to build in Ireland and China.
Another issue is that even chips that are fabricated in the US tend to go to Asia for final Assembly/Test.
What a coincidence!!!
(no message)
industry...which violates GOP orthodoxy, but paraphrasing Sen. Portman, sometimes you have to "Get Creative"...I've looked at other reports on this issue and each one noted that Congressmen and women on both sides of the aisle had their "Oh ____" moments when apprised of the situation vis-a-vis National Security. A case could be made for "Why didn't someone see this coming?"...begin the circular finger pointing scene.
China plays a prominent role here as well...maybe Mitch can get his wife and in-laws to say a few nice things to Xi.
national security.
But yes, creative solutions.
Thanks for the feedback.