Saturday, November 26, 2022
Nov. 26, 2022

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Harrop: U.S. wise to put its chips on chips

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Should Washington push an “industrial policy”? That is, should the U.S. government get involved in promoting certain domestic industries?

Darn straight it should. And that goes double when it comes to semiconductors. Computer chips are the little brains that run appliances, airplanes, mobile phones and cars. You can’t have a modern economy without them.

We saw what happens when key manufacturing activities go offshore. During the COVID-induced supply chain crisis, Western manufacturers couldn’t get their hands on the chips they needed to meet demand for their products. Some had to close or slowed production.

And so it’s hard to overstate how bringing chip-making to this country is good for this country. It would not only create many thousands of American jobs; it would ensure that other U.S. manufacturers don’t have to beg Asians for semiconductors.

Toward that end we should hail the Chips and Science Act, championed by the Biden administration. It was astounding that 187 Republican House members voted against the bill, though gratifying that 24 did.

The GOP leadership had joined Chinese lobbyists in opposing it. Never mind that chip independence had the full-throated support of several former Trump officials, notably former National Security Adviser H.R. McMaster. To partisan robots, the national interest rarely overrides the joys of political warfare.

Commerce Secretary Gina Raimondo rightly called the $52 billion in new semiconductor money “rocket fuel for our global competitiveness.”

This is part of a bigger picture in which the U.S. has been reversing decades of “off-shoring” factory jobs to lower-wage countries. Almost 350,000 jobs will be “reshored” this year — on top of about 265,000 added in 2021. The chips act and the Inflation Reduction Act are fueling many of the moves with tax breaks and other economic incentives.

Supply chains have become an economic battlefield of the 21st century. Raimondo, a former venture capitalist, has been wonderfully aggressive on this front. When Taiwan’s GlobalWafers abandoned a plan to spend $5 billion on a plant in Germany, she called the CEO and nabbed the factory for Texas. Here come 1,500 jobs.

The Chinese government has been pouring money into other hot tech fields, such as artificial intelligence and robotics. These are areas in which the United States used to have a safe lead.

“We need America to dominate in certain areas of technology,” Raimondo said. “Critical minerals, electric vehicle batteries, semiconductors, artificial intelligence.” This obviously goes beyond jobs. It’s about national security.

Well, is America going to compete or not? Washington just put its chips on chips. That would seem a smart wager.

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