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Comment by javajosh | Hacker News Reader

When these types of things are funded one always gets the sinking feeling that the money is just getting stolen and/or wasted by savvy insiders who know how to write grants or who know the right people. In fact, I think that's a reasonable assumption and some proof is required to show that it is not the case.

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> When these types of things are funded one always gets the sinking feeling that the money is just getting stolen and/or wasted by savvy insiders who know how to write grants or who know the right people.

That's definitely the feeling I get when I see the grants that get given out for Broadband to underserved areas. So much money gets spent on infrastructure for not much actual benefit.

Hopefully these fabs don't follow down that road. If nothing else, it'll be a lot easier to check and see if the objective were achieved, compared to broadband which is inherently much more decentralized.

It would be cool if there was a neighborhood watch but for projects and/or money. Like, a couple dozen people in the community who watch that specific money like a hawk, to make sure it benefits the community and moves along at a good pace and the actors don't take advantage.

One good thing with broadband is that the FCC is making companies publish service maps.

I've heard from multiple people that they've looked at the map and forced companies to make amendments when they claim to offer service in an area but don't actually.

This is exactly how I feel which is conflicting because my company gains from such funds. My multinational employer, based outside of the US, has been expanding into the US for years due to shrinking growth opportunity in Asia and Europe. In recent All Hands, the NA head has mentioned we’re applying for millions in grants through the IRA which is essentially subsidizing what we were planning to do all along.

I hope this at least means there’s no excuse to cut bonuses in upcoming years though.

Good thing there are $200B worth of proof already. At what point would you be satisfied, if 100% of semi manufacturing took place in the US and 0 chips were manufactured elsewhere the instant the grants were handed out?

It's odd but comments like yours would normally elicit something like anger, now elicit sadness. Why do you take this tone? Why do you willfully misunderstand my point? Why not take a charitable view?

I'd be happy if even half of that money actually went into a fab, and only half was wasted on lawyers, fees, studies, and wherever else free money manages to go rather than to actually building things. The timeline doesn't matter, nor does the fraction of on-shore chips made. You created those measurements out of thin air.

I took a very charitable take of your comment, that at best can be interpreted as “this policy was completely useless” when the evidence is staring you in the face. TSMC was clearly motivated by CHIPS to build fabs in the US for dozens of billions and pocketed a fraction of that as a handout. The fact that I’m writing this obvious information down is charitable.

The big question is what exactly is being built.

The CHIPS Act was marketed as an "AI cold war", and needing to bring high-tech research and production back to the US. Is is actually doing that by incentivizing companies to build leading-edge fabs in the US, or are companies just using it as free money to expand the production capacity of their trailing-edge processes?

Sure, having locally-sourced trailing-edge chips is still better than getting them from overseas, but it doesn't exactly do anything to reach the intended goals.

While skepticism is good, the skepticism should go both ways. What other types of funding like this are you thinking about?

It's been a long time since the US did industrial policy.

They profited offshoring now they will charge you to bring it back so they can profit some more. The wheel will continue to spin and nothing will come from it. Just enjoy the ride.

It's hard to fake a building going up.

While that's true, what _can_ happen with these sorts of subsidised projects is that the building goes up, but... that's about it, and nothing much ever happens in the building (this was essentially the case with that Foxconn Wisconsin thing, say). That said, that does _not_ seem to be the case in this instance, but, in general, a building going up isn't great evidence for anything.

The building is the easy part, almost trivial part.

Getting the enough ASML machines to supply a fab for an advanced process (and they have a backlog that is almost a decade long), starting up the whole complex logistical process to feed the fab (with lots of single source suppliers that are already committed to the existing fab capacity), getting all the necessary personal and skillsets started and getting the fab working, creating all the little feeder companies that are necessary around the fab, all that is hard work. It is is something that the US has largely lost most knowledge of how to do with all the outsourcing of industrial capacity.

And all this has to be done agains the upwind pressures of our service economy. Our politicians are largely lawyers, our financial sector focuses on short term returns, and our companies are rife with lawyers and MBA layers taking their cut out of the necessary investments in manufacturing and engineering. None of this is encouraging for the necessary long term slog to bring back industrial capacity, particularly something with as complex and deep logistical tail as semiconductor manufacturing.

The solution to what you mention is to turn the big levers that have an outsized impact.

Such as slashing the corporate tax rate (and the offset is to raise the individual tax rate on higher incomes). Which is the Ireland model, and it works extraordinarily well (even more so if you already have a desirable foundation). Cut it far enough and it'll lure more companies and jobs than you can absorb. And meanwhile the corporate income tax is an increasingly trivial component of the US Government's funding, it's no longer very important. If anything we should cut it further (~15%) and very aggressively pull companies, investment, R&D, manufacturing out of foreign nations and into the US. The corporate tax rate is a magnet, the lower you go the stronger it is (and there is no doubt a significant diminishing of returns as you go below a certain % figure).

Increase the standing incentives (not only one-off programs like the CHIPS Act).

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