Yesterday, we talked with Kip Eideberg of the Association of Equipment Manufacturers about the CHIPS Act which is cutting down on our reliance on foreign-made semiconductor chips. Many of these come from China, and the recent supply chain issues have put a huge dent in the supply we have available for cars, implements, and many other electronic technologies.
With the passage of the CHIPS Act, Congress is putting forth funding to develop more of these chips back in the United States. But what does that mean for the future of semiconductor technology in the U.S.? There are a few points we must consider and question.
First, the reason we outsourced so many of these chips from countries like China is because of the cheap costs at which we get them. However, the Chinese economic structure is known for not necessarily paying high wages to its workers, therefore their cost of production is low. In the United States, workers expect a livable wage, and costs of production and shipping will likely be higher. What does that mean for the costs passed on to the consumers? Eideberg Says that it is too early to tell what those price tags will look like, but the key is bringing more jobs to the U.S., and not being reliant on countries who are not friendly to the United States.
Eideberg went back to reference the survey we talked about yesterday and how CEOs of manufacturing companies say it is up to the government to find ways to support American businesses by implementing policies that help us survive in a marketplace for these types of products. A marketplace that is dominated, globally, by China.
The next question is how long it will take to get this congressional act to come to fruition in the American economy. It?s not like President Biden?s signature will immediately flip a switch and start production. There is going to be a timetable for getting this off the ground. Eideberg talks about realistic concerns for getting this increased production going.
AEM is excited about the benefits this will have for rural economies. Where factories could be built, or whose companies are relying on that steady supply of semiconductor chips.
