It is an important day, I suppose, to talk about the decline of electronic chip manufacturing in the United States. Throughout the nineties, the United States — mainly due to Intel’s market share — was the leading manufacturer of chips in the world.
As the WSJ ($) report shows this has declined significantly to only 12% of the total capacity since the heydey in the nineties.
The breathing room left by the market share in the United States has been almost all taken up by China (which has grown out of nowhere to 15% market share). I have been pointing out that low-value production such as textiles/apparel has been significantly moving out of China to the Philippines, Vietnam, and Bangladesh as China ascends up the value chain in production.
You can see Taiwan’s market has remained steady — mainly due to TSMC. Recently, on this blog, I was cautiously hopeful but skeptical about TSMC’s move to begin manufacturing chips in Arizona, New TSMC Plan(t) in America: Lessons from Foxconn. (I am doubtful whether the production volume will be high, and fret that manufacturing will focus on an outdated 5nm chip).
The article focuses on what incentives the United States government and the state governments can offer to kickstart production in the US. My pet peeve is that all these reports ignore the hard work and time commitment necessary to build a skilled labor force. (After all, the production capacity in mainland China was not created overnight).
As an election is going on, the slow march of dwindling supply chain capabilities proceeds unstopped. This is a problem that needs more attention.