The promise of a semiconductor manufacturing renaissance in the United States may come to fruition during the next presidential term, despite significant groundwork laid by the Biden administration.
In recent years, the Biden administration has made strides in enhancing the semiconductor production landscape within the United States. Significant commitments were secured from leading global chipmakers such as TSMC, Intel, Samsung, Micron, and SK Hynix to build factories across the nation. These projects aim to revitalize the production of technology integral to numerous sectors, including consumer electronics and defense.
Despite these efforts, many factories are still under construction, and it could take several years before they become operational. This brings to light the possibility that job creation in the semiconductor manufacturing sector may peak under the Trump administration, as factories begin to open and ramp up hiring.
Jeff Koch, a well-regarded analyst, highlighted that while construction jobs have been created, the expected wave of manufacturing employment has not yet arrived. Industry experts anticipate that the completion of these facilities and the operational hiring will align with the upcoming administration.
A significant player in this transformation is the CHIPS Act, which allots $39 billion in manufacturing incentives. The Biden administration’s challenge is to finalize these funding agreements before the transition in leadership. Notably, these initiatives could yield approximately 42,000 direct manufacturing jobs and an estimated 101,500 indirect jobs at suppliers, according to a Semiconductor Industry Association report.
However, the process of building semiconductor facilities is notoriously complex and time-consuming, often taking three to five years to complete. This complexity is compounded by technological advancements, necessitating rigorous construction processes. As Jimmy Goodrich of RAND Corporation noted, producing semiconductors involves achieving precision on a microscopic scale, contributing to extended timelines for factory readiness.
Furthermore, planned opening dates for various factories indicate potential delays. TSMC’s Phoenix facility, initially expected to start full-scale production soon, has faced postponements. Similarly, Micron’s expansion plans in New York and Idaho and SK Hynix’s operations in Indiana are slated for later years.
Despite these hurdles, the overarching goal remains clear: to promote domestic chip production and safeguard essential supply chains. This push could reduce reliance on international sources, particularly from Taiwan, which has been a strategic concern for the United States.
The anticipated benefits from these complex projects underline a broader economic impact that transcends individual administrations. While Biden’s policies set the stage, the long-term gains, including job creation and strengthened self-reliance in semiconductor technology, are expected to manifest over the coming years.
As the semiconductor manufacturing landscape evolves, the efforts to boost domestic production are a testament to strategic foresight. Though the full impact of these initiatives might be realized over several years and possibly under different political leadership, the groundwork laid today represents a critical step toward a more resilient and self-sufficient technological infrastructure.
Source: Businessinsider
