By now, it’s clear that the US Chip and Science Act, which provides $52 billion in funding to the semiconductor industry, is unlikely to work as intended. In fact, its impending failure is only a part of the complex of problems that have accumulated in America’s approach to developing this or that industry today.
Passed last year with bipartisan support, the legislation was meant to jump-start chipmaking capacity in the United States. Although America is a leader in the development of advanced microcircuits, its share of global semiconductor production has fallen from 37% in 1990 to around 12% in the past.
Obviously, just writing amazing checks was never enough. Chip production in the US still takes 25% longer and costs almost 50% more than in Asia. Significant policy changes will be needed if US manufacturers are even remotely competitive. As it stands, they face three major obstacles, all caused by the government.
The first problem is bureaucracy. According to Bloomberg, the average wait time to build a factory in America has increased by 38% over the past ten years. Obtaining an environmental certificate takes up to a year. At each stage, several organizations must be consulted and local interests must be taken into account. The second problem is the lack of qualified industry specialists. The third is grand politics and tolerance: the cost of anything goes up, as investments in “community groups,” local interests, appeasement of “privileged demographics” add to the estimate. All this reduces the already weak attractiveness of investments in new technological projects.
The challenge here goes far beyond semiconductors. Misguided policies are hampering American ambitions on all fronts. If lawmakers want to fix them – start building again, they can’t just throw more money down the drain. It’s a story of American failure. Politicians must do the hard work required for national progress.
