In summer 2022, Congress passed the Chips and Science Act that allotted $39 billion to strengthen the domestic semiconductor industry.
The $39 billion is pocket change in an industry expected to spend as much as $3 trillion over the next 10 years to meet global demand for its products. The federal funds are seen as incentives or seed funds to sow projects of strategic importance and to restore chip manufacturing as a matter of national security.
Now, to decide which companies will make the most strategic and effective use of the money, the commerce department has recruited about three dozen investment bankers, management consultants, and private equity investors.
Their ages range from 23 to 64 and almost half are women, The Wall Street Journal noted. The group includes former executives from Blackstone, Goldman Sachs, JPMorgan, and McKinsey & Co., among other well-known names.
They will weigh and judge 460 funding proposals, including some from industry giants such as Intel, Samsung, and Taiwan Semiconductor Manufacturing.
Each application is assigned a team, with junior members running models and analyzing proposals to see which are most likely to reach the goals the companies plan to use federal funding to achieve.
Each funded proposal must hew to political requirements that include a diverse workforce, caps on executive compensation, strictures on expanding in China, and even mandatory daycare for employees’ children.
Some companies already have complained about these “strings attached” to federal money.
“The stakes are high and the world is watching,” John Neuffer, president of the Semiconductor Industry Association, told the WSJ. “It’s critical we get this big experiment in industrial policy right.”
However, not everyone thinks that industry experts guiding government spending is a good idea.
“Politics always takes over,” Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, grumbled in a WSJ interview. Pressure to channel funds to favored companies or geographic areas can be hard to avoid or resist, he said.
As next year’s election draws closer, the focus will be “less on chips and more on creating happy stories for job creation,” Hufbauer predicted.
Initial allocations of the funds are expected to be made later this year.
TRENDPOST: Thanks to the crime syndicate running Washington, D.C.—that is owned and operated by the mega-corporations, hedge funds, private equity groups, venture capitalists, etc.—they have sold out America by altering tax and trade laws that once made it prohibitive to import products from overseas nations with cheap labor. The U.S., once dominant in chip-making, now produces only about 10 percent of the world’s semiconductors. Taiwan is now the largest producer; China and Japan also are major suppliers.
As illustrated by who is running the U.S. chip-making scheme, it further enriches the rich which is the merger of state and corporate powers… what Benito Mussolini labeled as “fascism.”