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Schumer gets semiconductor industry support into defense bill

Daniel Nenni

Admin
Staff member
MALTA — U.S. Sen. Charles Schumer announced Monday he has successfully gotten his $25 billion domestic computer chip manufacturing bill included in the final version of the fiscal 2021 defense budget.

It remains unclear, however, if President Donald Trump will sign it.

The bipartisan bill, which Schumer originally called the American Foundries Act and first attached to the defense bill back in July, would support U.S.-based computer chip manufacturing in order to ensure that the U.S. military will continue to have access to a domestic chip supply.

The bill would greatly aid a variety of computer chip makers in upstate New York, including GlobalFoundries, IBM and Cree, which is building a new chip fab outside Utica with financial assistance from New York state.

Trump has threatened to not sign the defense bill if it doesn't include language to repeal Section 230, a federal law that gives social media companies protections for what their users post.

GlobalFoundries is one of a few U.S. companies that have so-called Trusted Foundry status with the defense department to supply computer chips to the military.
Schumer and others in Congress have been pushing the U.S. to shore up its chip manufacturing leadership in order to protect its supply from global competition in Asia and China especially, where more and more chips are being produced.

With rumors that China has its eyes on re-taking Taiwan, the concept is even more important. Taiwan Semiconductor Manufacturing Co. is the world's largest chip foundry that makes chips for other companies, including Apple. GlobalFoundries is number two.

The American Foundries Act would create several chip manufacturing and research funds that could provide tens of billions of dollars in incentives for U.S.-based companies like GlobalFoundries to expand their chip making operations to ensure the U.S. military has an adequate supply of chips for weapons systems.

“The economic and national security risks posed by relying too heavily on foreign semiconductor suppliers cannot be ignored, and upstate New York, which has a robust semiconductor industry, is the perfect place to grow domestic semiconductor R&D and manufacturing by leaps and bounds,” Schumer said in a statement.

Schumer's bill was not only supported by GlobalFoundries, Cree and IBM but also Cornell University, Binghamton University and SUNY Polytechnic Institute, all of which do semiconductor research.

 
Ensuring a reliable non-Taiwanese supply of chips is a smart long-term move... handing out $25B to Schumer's constituents in NY seems a little questionable though.
 
Ensuring a reliable non-Taiwanese supply of chips is a smart long-term move... handing out $25B to Schumer's constituents in NY seems a little questionable though.
It's a very short term move.

In comparison to industry size, $25B are peanuts, and it will not pass the critical mass needed to kickstart a resurgence.

American's domestic semi has stalled for reasons other than the lack of money... Look, out of all countries US, and its semi companies have the most of moneys.

Besides money, they need to provide few more zeroes of top-tier engineering cadres, a non-absurd legal environment where a patent troll can't shut down a $10B fab with a single writ, have half of world's chemicals, and materials industry move back to US, a non-captive utilities market, and many, many, many more things.

And by the way, a passing birdie told me that one of the biggest benefactor from that $25B will be Xilinx through some unimaginably contorted scheme. Right now Xilinx fabs its military use FPGAs on a sealed floor at UMC in Taiwan, and allegedly that is supposed to deter spies from a country up north. Under the scheme, they want to do them "fully within US borders," but still fab them in TSMC Taiwan... while doing CoWoS packaging in Arizona USA, if TSMC's Arizona packaging plant will succeed in materializing.
 
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I know IBMers who blame NY state handouts for signaling the downfall of IBM semiconductor manufacturing. Instead of building their 300mm fab in VT with their experienced workers they moved to Fishkill for the subsidies, only to have many years of terrible yield while the new workforce got up to speed.

GF just spun off their design team only to replace core functions with a new team in Bangalore.

Writing is on the wall for Intel which depends on financial engineering more than anything else to justify themselves to Wall St.

I think there's something more systemic at play than a semiconductor clause in a defense spending bill cares to address.
 
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