How does one start a semiconductor manufacturing company?
More seriously, find a low-performance niche application and make chips on old technology for it. Differentiate yourself on the basis of being easy for your customers to work with, a natural advantage for US-based companies. Then you only need several dozen million dollars.
Some electric car companies have not had trouble tapping into capital markets. Even Transmeta, a fabless IC maker, could tap $275m in 2000.
If you were a super talented engineering firm with the ability to spend $2b on a fab, you could tap finance for it.
> More seriously, find a low-performance niche application and make chips on old technology for it.
This seems like the opposite of any winning strategy, and the opposite of what the government should subsidize. TSMC is so successfully because it relentlessly focuses on performance chips. If you are enjoying American subsidies it better be for the cutting edge, what the hell else are we paying for?
> Differentiate yourself on the basis of being easy for your customers to work with
The only customer that matters is Apple, and your only competition is Samsung and TSMC. Everyone else is using "foreign chip manufacturers" as a way to launder low Chinese labor costs, not because there is inadequate supply or poor competition in specifically semiconductor manufacturing.
Perhaps that's what people want - a manufacturing hub, i.e., assembly of chips, not the chips themselves. I don't know if that's super important.
And it's really more talent in process engineering that you need, not in the physics of chip building. We already know what has to be done to make transistors. It's the how to do it at scale and with high enough yield that's impressively difficult.
A project like this would a) let them use far more of their training than coding ever would and b) it is for a good cause, effectively a peaceful version of the Manhattan project.
Are chips for industrial equipment or cars? When you say cutting edge I think desktop / phone / servers.
On the other hand, tax credits can be (but arent guaranteed to be). That is, if a tax credit incentivizes creating jobs that would not have existed (in the US) otherwise, those jobs end up also stimulating other economic activity. Tax incentives at the state level tend to be closer to zero sum (or a net loss) if the jobs would have been created anyway, or when thr incentives aren't strictly tied to quantifiable completion metrics like factory completion, number of positions filled, etc. (Much ado about Foxconn in Wisconsin, etc)
The fact that governments try to do Keynesian by making manufacturing jobs in 2021 kills me. We're decades past the point where those sectors were sufficiently unproductive to benefit the workers as they did in the glory days. Boost demand directly (UBI), keep an ey on imports, and let private capital fend for itself.
This doesn't make sense to me. There wouldn't be labor to empower if the tax credit was one of the factors that determined whether the plant would be opened here or not.
Zero-sum would imply that, were the tax credits not handed out, the revenue would instead go to some other program- except that in this scenario, there is no revenue without it.
Sure, we could get into a trade war with the rest of the world by taxing or banning imports, but that would definitely leave everyone worse off.
Think owners vs non-owners. The non-owners don't cease to exist if they are unemployed (or underemployed). We live in a world with massive material surplus, so the idea that we can't afford these people's basic needs without the plant is just wrong.
From that perspective, if the government is propping up businesses without propping up a weak labor market (either by more demand or fewer working hours), it's perpetuating system where employers have too much leverage.
> Zero-sum...
Right now the US federal government is uniquely capable of running deficits. I'm not worried but zero-sum in that sense.
> Sure, we could get into a trade war with the rest of the world by taxing or banning imports, but that would definitely leave everyone worse off.
Yeah I don't want trade war, I want race to the top. Higher wages, fewer working hours, etc.