So in recent years, the US has finally realized that having the largest chipmakers, that being TSMC, Samsung, and Intel, have their massive factories in Taiwan and Korea it’s a bad idea for national security.
The all Democratic Congress and the White House worked together and passed the CHIPS Act in 2022. This provided over a hundred billion dollars in subsidies for building massive, expensive chip fabs inside the US to handle increased demand and increase national security. It was supposed to result in investment of hundreds of billions of dollars in the US as well as create a hundred thousand jobs.
And none of that money has been used yet. Why? Intel, TSMC, and Samsung don’t want it.
Why? Well, DEI of course.
See, in order to gain access to the subsidies, everything from the construction workers, to suppliers, to engineers, and finally fab workers need to meet stringent government DEI requirements.
For instance, 40% of construction workers need to be female. Except only 10% of all construction workers are women currently. Additionally, chip makers must provide fully paid for childcare and healthcare for everyone involved including construction workers. Obviously, this skyrockets the price of everything from the moment they break ground. Of course, the quotas for minority workers are there too.
The issue is these fab facilities are basically the most advanced factories in the world. It’s not like anyone can be employed at them. These are not Amazon warehouses. Fab workers frequently make well into the six figures and have master’s degrees in engineering. In fact, during construction on one fab, TSMC had so much difficulty finding local talent, they flew in 500 Taiwanese engineers which angered the federal government and local authorities.
So guess what they did? They stopped construction. Intel and Samsung have also similarly ceased construction on their fabs and reallocated capital to fabs in Israel, Europe, and Asia. Currently only one fab is being under active construction in the US despite the aforementioned hundred billion dollars available to subsidize construction.
Why? Because the federal government shoves stupid requirements down the throats of companies that dramatically increase cost and time to production. All in the name of DEI.
I’m not entirely against some form of DEI and certainly believe everyone should be given the same opportunities, but in specialized fields or fields that don’t appeal to certain people there simply aren’t enough qualified applicants to fulfill most DEI requirements. Not to mention the additional costs such as providing childcare. DEI requirements don’t work if the people you need to hire literally don’t exist, which they most certainly do not in this case.
I heard a fascinating story from a friend who ran a division at Intel a few years ago. This was a highly specialized field which just happened to be dominated by white men. It was also crucial to Intel’s future plans.
Except Intel famously had very strict DEI quotas and requirements. They made no secret of it, frequently bragging about it on earning’s calls and at conferences.
So this division started by first hiring all of the qualified applicants, which were almost all white men. And then they tried to hire more diverse applicants…and hit a brick wall. Why? These people simply don’t exist. As an anecdote, I studied computer engineering, exactly the degree these chipmakers hire the most. My graduating class of 60 some people in my major had 2 women and under 10 minorities.
So this project at Intel quickly fell behind and was failing because they didn’t have the staff necessary to complete their goals. Their hiring became so impossible my friend went to the CEO of Intel and got her division exempted from DEI requirements. This was all done very quietly.
The CHIPS Act sadly is a massive failure not because it wasn’t a good idea or the economics of building fabs in the US doesn’t work. It’s a failure because of the stupid onerous requirements that Democrats added to the bill which make accepting the subsidies unfeasible for these large companies.
The result? No new fabs will be built in the US, chips will continue to be made abroad in conflict zones, national security will suffer, and tens of thousands of jobs and hundreds of billions of dollars in investment in the US will be made abroad.
Smart move, morons.
> Additionally, chip makers must provide fully paid for childcare and healthcare for everyone involved including construction workers. Obviously, this skyrockets the price of everything from the moment they break ground.
Will the CHIPS act not pay for that stuff? Ideally people would get actually decent benefits and the grant would pay for it.