Biden’s Semiconductor Plan
Source：New York Times
From：Taiwan Trade Center, Chicago
Update Time：2023/03/21
The Biden administration has developed a plan to increase semiconductor production within North America, and with it a plan to make the chip industry adopt progressive policies for its workers and finances. Last year American lawmakers passed the CHIPS act, which devoted $52 billion to expanding U.S. semiconductor manufacturing and research. The goal behind this plan is to make the US less reliant on foreign suppliers for critical chips that power computers, household appliances, cares and more. With the promise of subsides, a year later, this plan has already drawn interest from domestic and foreign owned chip manufacturers. Plans to being construction in Arizona, Texas, Ohio and New York are already underway.
However new requirements set by the federal government on accessing some $40 billion in subsides makes clear the government is making an aggressive attempt to ben the behavior of corporate America to accomplish economic and national security objectives.
As the Biden administration makes the federal governments its first move into industrial policy in decades, officials are also using the opportunity to advance policies championed by liberals that seek to empower workers. For example, the Commerce Department will release its application for manufacturers seeking funds under the law at the end of February. However, the department will tell companies seeking awards of $150 million or more to guarantee affordable, high-quality child care for workers who build or operate a plant. Additionally, companies applying for awards will be required to submit detailed financial projections, with the federal government entitled to share in any “upside” profits. This, in theory, incentives companies to make their projections as accurate as possible, and not exaggerate any losses to try to secure more funding. Finally, preference will also be given to applicants that promise to refrain from stock buybacks, which tend to enrich shareholders and corporate executives by increasing a company’s share price. The law also already prohibits companies from directly using federal money to finance stock buybacks or pay dividends.
Despite these regulations, it is still expected America’s new semi-conductor manufacturers are likely to apply for these government funds. The result of these tighter regulations will be determined in the coming years.
Source: https://www.nytimes.com/2023/02/27/us/politics/chips-act-biden-commerce-department.html