If we are discussing national strategy, rather than arguing over particular firms that should or should not get taxpayer dollars (
as I mentioned in another similar post, the CHIPS act as it stands now doesn't earmark to particular firms), it would be good to look at Taiwan's example in the 1970s.
I've been reading Tiger Technology by Mathews and Cho. Here's a particularly relevant quote (p. 194-195 of paperback edition):
---- begin quote ----
The aim of this chapter has been to demonstrate that the semiconductor industry in Taiwan did not simply 'evolve' through the operation of market forces or through decisions of multinational corporations to include Taiwan in their global production networks. Rather, the industry was created as a deliberate series of acts of public policy by the Taiwanese authorities. In the 1970s, these steps started with the building of technological capabilities, leveraging the skills and knowledge required from all available sources, but concentrating them first in the public-sector laboratories of ITRI. When the time was judged ripe to involve firms, it was again the public authorities who seeded the development with the creation of UMC as an act of public entrepreneurship, in pure Gerschenkronian fashion.
Likewise the industry was propagated through the creation of public resources in the form of the Hsinchu Park, the Common Design Center located on the park (to spark the formation of small IC design firms) and the provision of a public IC foundry in the form of TSMC. The industry's technological capabilities were deepened through such programs as the submicron project, while they were broadened through the managed extension of the scope of activities, for example, in silicon wafer fabrication. All the while the Taiwan authorities were encouraging the private sector to take initiatives and assume more responsibility for technological and market expansion.
This the industry was doing by the 1990s, as firms initiated technology leverage agreements for themselves --- notably in the case of DRAMs --- and internationalised their operations. The public authorities meanwhile turned their attention to the sparking of new follow-up industries, such as LCDs and other flat panel displays which, after repeated efforts, were flourishing in Taiwan by the end of the 1990s. All of this adds up to a powerful system of continuous technological leverage and diffusion, managed by institutions crafted for the purpose. It can most fittingly be described as a national system of economic learning.
---- end quote ----
Mathews and Cho's thesis throughout the book (more or less) is that Korea, Taiwan, and Singapore achieved successful latecomer status in the semiconductor industry by organized activities to license and disseminate existing technology via national institutions, going through several stages, the last of which is to let private industry mature mostly on its own.
Since the US semiconductor industry is already mature, one question becomes: what do we need to do to overcome shortcomings that the market economy is unlikely to achieve on its own? (supply chain robustness, for example?)
If we're just looking to put our national thumb on the balance scale to make US semiconductor companies / equipment companies have a level playing field compared to other countries' incentives... well... not sure how likely that is to succeed. But at least there is a tangible public benefit through the likelihood of increased tax revenue if US companies (or foreign companies with US manufacturing presence) succeed.
