Winning With Uncle Sam’s Help

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To remain competitive against China, should the United States like little else?

I’m getting excited, but that’s essentially the question behind the plans of the US government Provide financial help to American-made computer chips, And perhaps for other homegrown technologies as well.

In practice, the US government subsidizes or supports industries at all times. But the idea of ​​the government helping its favorite industries is something that the United States usually terms as a distortion of free markets. This is what China does, or What European governments do to their major airplane manufacturer.

This is why a thorny policy debate is beginning with computer chips: Should the government intervene more to create American winners, most notably in technology and other key areas? And if so, how?

What’s happening: Computer chips are like little brains or memory in everything from my colleagues Ana Swanson and Don Clarke, from jet fighters and satellites to refrigerators and cars. written. Silicon Valley was named for a material in computer chips – and Intel was an industry leader and star. not anymore.

Taiwanese companies, including Taiwan Semiconductor Manufacturing Company and Samsung of South Korea, have taken the leap forward in advanced designs, and they are now the king of manufacturing. The majority of chips around the world remain outside the United States, in part due to government subsidies abroad.

Pandemic causes chip shortage US car factories slowed downHaving a secure and uninterrupted supply of chips at hand, due to greater urgency between the US military and US corporations.

So last year, Intel and federal government agencies Proposed financial support for US chip manufacturing. The result was an authorization of taxpayer funds to subsidize chip research in American chip factories and military research bills Finalized a month ago.

Congress has not yet funded the program, so the dollar amount and nuances are limited, Don told me. He also said that it could take years to translate government money into US-made chips. But you get the goal: make sure more chips are churning inside US borders, whether built by Intel or foreign chipmakers On american soil.

Big Picture: China is in the background of all this. A fear is that Perennial stress May occur at some point between China and Taiwan Disrupt chip industry on island And influence the rest of the world.

The Chinese government has also been Spend gobs of money To develop its own chip industry and rely less on imported chips and equipment.

In political, military, and economic competition between the United States and China, chips are one of the major fronts.

What will happen next: This is a strange scene in Washington: Republican politicians who prefer less government intervention are sitting on the left side with politicians in support of more government support of private companies. This is true for computer chips and some other fields, including artificial intelligence, robotics, and advanced manufacturing.

One question is how to support industries without wasting taxpayers’ money. Advocates for government support have supported corporate spending on research and development, government support for basic scientific research, and more generous tax credits for taxpayer-funded investment funds in strategic industries such as chips, batteries, and cars. America has done this before, Especially in the 1980s and 90s When Japan was a growing economic power.

This debate is about more than one policy. It is about finding out the appropriate role of government in the economy, and what America should do when other countries hold endless cash in their national champion companies.

And finally it’s a window on the big question that I am Constantly thinking: What should America do about a future in which technology is becoming less American?

When I first heard about government funding proposals for the chip industry, I thought about the 1990s and the equipment for telephone networks. (Yes, I am very cool.) Come with me on a journey of history.

North American companies were once the king of another essential industry: the gear that telephone companies needed to route the world’s communications. But for complex reasons, American titans including Lucent – the successors of the old Bell Labs – were sold to foreign companies or died.

Today, the world’s leading telecommunications equipment company is Huawei of China, and the United States Getting to know about it.

So I wondered if Huawei is a cautionary tale of America’s missed opportunity. If the US government threw taxpayers’ money behind the country’s telecom sector in the 1990s, as is happening now with chips, would there be a Lucent Thrive and not a Huawei?

I put that question Rob Atkinson, Who wrote a history last year US telecom equipment companies decline. “If you really wanted to save Lucent, I think they could have saved it with US government money or debt”, he said.

Dr. Atkinson is president of the Information Technology and Innovation Foundation, a research group that receives funding from telecommunications and tech companies including Intel.

Of course, the death of US telecom companies and the rise of Huawei have complex reasons. I wish you more Dr. I encourage you to read Atkinson’s article. It is also impossible to ascertain whether the US government in the preceding decades would have actually changed anything for Lucent and his comrades.

Dr. Atkinson’s organization supports More US government investment in essential industries Including chips. And like others who back those policies, Drs. Atkinson said that the US also needed to lay down the terms of its trade and diplomacy with China so that the country could slow down heavy support for its domestic industries.

Teach cat to feed. The best part is the man’s pleased response.

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