A sweeping 2022 law, touted by President Joe Biden as a way to revive US manufacturing of semiconductors and reduce the country’s reliance on foreign-made computer chips, will “sharply increase production” of semiconductors in the United States. But it will do so at a high cost and might not deliver the best bang for the buck, concludes a report out on Wednesday by an economic think tank in Washington.
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Researchers at the Peterson Institute for International Economics calculated that the US$280 billion Chips and Science Act will create about 93,000 construction jobs as chip factories go up in the United States and 43,000 permanent jobs once they are in operation.
But the government subsidies behind the expected chip manufacturing boom mean that each job created will cost taxpayers about US$185,000 a year – twice the average annual salary of US semiconductor employees, the Peterson report found.
“More production might not provide the best security for the money,” researchers Gary Hufbauer and Megan Hogan wrote.
The Peterson reports notes that in passing the Chips and Science Act Congress “did not consider alternative way” of spending billions of dollars to ensure the US had adequate chip supplies.
Other options could have included creating a chip stockpile run by the Federal Emergency Management Agency or providing financial incentives for US chip users and foreign chip producers to keep bigger inventories of semiconductors in the United States.
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