This week Congress passed a bipartisan bill that I expect will have a long reaching impact on the US Manufacturing sector, on the US Economy, and in fact on the Security of the US. The CHIPS and Science Act includes $52B in subsidies to semiconductor manufacturers to incentivize the construction of domestic semiconductor fabrication plants that make the chips used in everything from cell phones and cars to medical equipment and military weapons. The bill is now on the President’s desk for signature.
As they announced early this year, Intel already has plans in place to build two new chip factories in Ohio, and this bill will help secure those plans. And of course, this doesn’t just represent the building of two plants. This type of investment will attract dozens of ecosystem partners and suppliers needed to provide local support for Intel’s operations, creating a significant economic impact on the broader US semiconductor ecosystem.
This news is just the next wave in a trend that I’ve been writing about for a while now. As supply chain issues have reached critical mass over the past few years, there is an increasing recognition that the decades long trend to offshore manufacturing has gone too far. Sometimes this is just inconvenient, causing us to wait for that consumer product that we want delivered the day we order it. In the case of computer chips, the impact can be devastating and even dangerous. The New York Times recently published an article pointing out that 90 percent of the most advanced category of mass-produced semiconductors used in smartphones and military technology, called 5 nm, are produced in Taiwan. US factories make none. Given the current geopolitical situation in the region, this has the potential of causing a national security crisis if the supply was cut off for any reason.
Of course, the ability to sustain a move towards onshoring manufacturing across industries will have to balance labor shortages and labor costs in order to maintain productivity and competitiveness, and high performance automation will be an important part of the equation. That’s where Betacom comes in. With our private 5G service, we provide the secure and robust network connectivity needed to make these plants hum.
I wanted to take a moment to applaud Congress for having the foresight to bring this bill to life. The vital interest of all of us, and of our country as a whole, is genuinely at stake.
Johan Bjorklund, CEO Betacom