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Another move by the U.S. is the passing of the CHIPS Act in an attempt to bring semiconductor manufacturing back to the country. I highly doubt we can succeed on that. The $1.7 million price tag for a single small public toilet in San Francisco clearly shows the high costs and inefficiency on doing just about anything in the U.S.

 

Besides, it's estimated that we will need 50,000 new engineers in the next 5 years in order to fill our reshoring needs. One university, Perdue, is supposed to increase their engineering graduates from 150 per year to 1,000 per year. As shown in the just released National Education Assessment Report, students math score declined in all 50 states. Where will we find these 50,000 new engineers? Can we really import so many of them?

 

finance.yahoo.com/news/san-francisco-building-single-publ...

 

San Francisco building single public toilet that will cost $1.7 million and won't be completed until 2025

 

finance.yahoo.com/news/why-us-tech-controls-on-china-coul...

 

Why US tech controls on China could end up hurting American semiconductors

 

When the US first banned sales of certain tech products to Chinese tech firm Huawei three years ago, it crippled a once-proud national champion and sent ripples across the US semiconductor industry. In the quarters following that export ban in May 2019, top American chipmakers reported a median revenue decline of 4% to 9%.

 

The Biden administration’s latest tech controls threaten to accelerate those losses, throwing the global semiconductor sector into disarray. And Chinese companies targeted by the new regulations won’t be the only ones feeling the pain.

 

“If China really wants to be as aggressive as the US and retaliate, there could be a lot of impact for other companies in the US,” said Edith Yeung, Race Capital General Partner, in an interview with Yahoo Finance Live (video above). “This is beyond impact on revenue for Intel (INTC) or Qualcomm (QCOM) or NVIDIA (NVDA).”

 

The US has long been a global leader in semiconductors, commanding roughly 45% to 50% market share. However, that leadership has been built on global demand for its products, with China consuming roughly 75% of semiconductors sold globally.

 

Chinese device makers alone accounted for roughly a quarter of global semiconductor demand in 2018, according to a study by Boston Consulting Group (BCG).

 

'More than just a preventative tool'

 

That innovation cycle is at risk of being picked apart, with the Biden administration’s sweeping tech controls, aimed at freezing China’s semiconductor development and dramatically limiting critical technology exports from the US

 

“Technology export controls can be more than just a preventative tool,” said National Security Adviser Jake Sullivan, ahead of the administration’s announcements. “If implemented in a way that is robust, durable, and comprehensive, they can be a new strategic asset in the US and allied toolkit to impose costs on adversaries, and even over time degrade their battlefield capabilities.”

 

'A sea change' in policy

 

Specifically, the new measures block sales of semiconductors critical to the development of artificial intelligence, supercomputers, and other advanced technologies, unless companies receive exemptions. It also expands an existing ban to sell advanced chip-making equipment to Chinese firms.

 

In a broad escalation, the Biden administration’s actions also restrict US firms and citizens, including permanent residents, from supporting China’s development of advanced chips.

 

The restrictions announced earlier this month have already created a chilling effect.

 

At least 43 senior executives are American citizens working with 16 publicly listed Chinese semiconductor companies, according to the Wall Street Journal. Western firms like Dutch equipment maker ASML Holding NV have suspended American employees from working as a precaution, while they seek further clarity. What's more, Apple temporarily halted plans to use memory chips from China’s Yangtze Memory Technologies Co. in products, according to Nikkei Asia.

 

“This is really a sea change in policy… the U.S. is imposing a freeze-in-place strategy toward China's indigenous chip development,” said Reva Goujon, Rhodium Group Director. “[The semiconductor sector] is an interdependent, interlocking ecosystem where all the parts kind of have to be in place for things to work to be able to upgrade to more and more advanced levels. So, if you cut the legs out from under that production cycle, you can really cause a lot of disruption, which is exactly what the US intent is.”

 

Impact on US chipmakers

 

The disruption may not be limited to Chinese firms. A 2020 study by BCG estimated that US companies could lose 18% of their global market share and 37% of their revenues over the same period if the US completely bans semiconductor companies from selling to Chinese customers.

 

The measures have already prompted chip equipment maker Applied Materials to cut fourth-quarter estimates for net sales by approximately $400 million. Q4 non-GAAP (Generally Accepted Accounting Principles) adjusted diluted EPS (Earnings per Share) is expected to range from $1.54 to $1.78, compared to the prior range of $1.82 to $2.18.

 

While the restrictions are limited to next-generation chips now, NVIDIA, the largest US chipmaker by market value, warned in August that new licensing requirement on advanced chip shipments to China could cost the firm as much as $400 million in quarterly sales.

 

“There’s certainly a chance this could have a much bigger waterfall effect but I think these companies have already looked at the situation, they’re assessing it,” said Daniel Newman, Founding Partner and Principal Analyst at Futurum Research. “I’m not overly alarmed that it’s going to be the whole portfolio [of chips]... I think this is about leading the arms race for the next generation of technology in areas like supercomputing, high-performance computing, and artificial intelligence.”

 

Containing technology 'where they need to be'

 

Secretary of State Anthony Blinken has reiterated as much, highlighting in a recent address at Stanford University, that only “a small number of countries” are manufacturing or making tools to manufacture the highest-end semiconductors.

 

“We want to make sure that we keep those where they need to be,” Blinken said, without singling out China.

 

But Goujon argues that US firms, particularly equipment makers, face the risk of losing market share and revenue to competitors in countries that have historically had friendlier relations with the US, including Japan and South Korea. If companies there find a workaround for the Biden administration’s measures, Goujon said the new controls could end up backfiring on the US

 

“Foreign competitors to US [equipment makers] have an opportunity here, of course, to try to capture more market share in China if they can displace US persons and US linkages, which is possible in some areas,” she said.

 

“The US is applying heavy bilateral and plurilateral pressure for partners to follow its lead, and it's sending the signal that look, This package contains extraterritorial measures and we will add more if needed. But here's the window to try to basically align with our controls. So that's really going to be an important question now.”

 

 

www.cnn.com/2022/10/18/tech/us-chip-manufacturing-semicon...

 

The US is spending billions to boost chip manufacturing. Will it be enough?

 

United States does not currently have the same talent and supply chain pipeline as some Asian markets do to support a robust homegrown industry.

 

... the shortcomings are real. "When it comes to foundries, which are the manufacturing side of semiconductors, the U.S. has not really been a major player for many, many years," said Columbia Business School professor Dan Wang. While it very much used to be, manufacturing began migrating to Asia during the 1980s and '90s, Wang said. "One of the big reasons for this is that the cost of labor is lower, and it's just far cheaper to produce at a very massive scale, integrated circuits and chips, in those parts of the world," Wang added. Morris Chang, the founder of TSMC, said that it costs 50% more to manufacture chips in the U.S. than in Taiwan.

 

Now, simply having the facilities already set up to produce or expand chip manufacturing gives Asia a big advantage.

 

Moreover, the manufacturing of semiconductors requires a range of specialized inputs, including pure chemicals such as fluorinated polyimide, and etching gas, chip etching machines, and more. In places like Taiwan and Fukuoka, Japan, supply chains have developed where the providers of these products are located close to the semiconductor factories. There are also one or two companies that produce vital inputs and that have been trustworthy suppliers to companies in Asia for a long time. This is not yet the case in places like Arizona and Ohio, where plans to build massive chip manufacturing plants are already underway.

 

You also need a labor force willing and able to do the work.

 

In the United States, there is both a shortage of new graduates and experienced workers with the technical and engineering knowledge necessary to manufacture semiconductors.

 

"If we were to today, snap our fingers and have ten new fabs with the world's leading chips, we probably wouldn't have enough people to staff them," Scott Kennedy, a senior adviser at the Center for Strategic and International Studies, said. "That's the biggest bottleneck to the expansion of America's fab capacity, not capital."

 

Intel has tried to establish close relations with Arizona State University to recruit engineers, but it is unclear whether it and other companies building fabs in America will be able to hire enough trained engineers and technicians. If not, even the billions of dollars committed by the private and public sector may not be enough to reshore semiconductor manufacturing.

 

www.washingtonpost.com/technology/2022/10/23/engineer-sho...

 

Economic future of U.S. depends on making engineering cool

Purdue University races to expand semiconductor education to fill yawning workforce gap that threatens reshoring effort

 

WEST LAFAYETTE, Ind. — On a recent afternoon, an unusual group of visitors peered through a window at Purdue University students tinkering in a lab: two dozen executives from the world’s biggest semiconductor companies.

 

The tech leaders had traveled to the small-town campus on the Wabash River to fix one of the biggest problems that they — and the U.S. economy — face: a desperate shortage of engineers.

 

Leading the visitors on a tour of the high-tech lab, Engineering Professor Zhihong Chen mentioned that Purdue could really use some donated chip-making equipment as it scrambles to expand semiconductor education.

 

“Okay, done. We can do that,” Intel manufacturing chief Keyvan Esfarjani quickly replied. Just weeks before, his company broke ground on two massive chip factories in Ohio that aim to employ 3,000 people.

 

By some estimates, the United States needs at least 50,000 new semiconductor engineers over the next five years to staff all of the new factories and research labs that companies have said they plan to build with subsidies from the Chips and Science Act, a number far exceeding current graduation rates nationwide, according to Purdue.

 

“This is recurrently one of the top, if not the number one, long-term concerns that [chip companies] have,” Mung Chiang, Purdue’s president-elect and former engineering dean, said in an interview.

 

Chip companies aren’t alone in worrying about the problem — or in looking to Purdue, one of the country’s biggest engineering schools, for answers. Commerce Secretary Gina Raimondo, who is overseeing the chip subsidies program, visited campus last month to hear about the courses and labs Purdue is adding to rapidly expand semiconductor education. Several Defense Department officials also have traveled lately to Purdue, located halfway between Chicago and Indianapolis, to discuss workforce training.

 

Engineer shortages have long plagued the U.S. tech sector, with Google, Apple and others complaining that immigration restrictions made it difficult to find employees. They’ve spent years pushing for an expansion of the H1B visa program for highly skilled foreign workers, to little avail.

 

As more production migrated to Asia, fewer U.S. students studied semiconductor engineering. At the same time, the rise of social media and other software-focused companies shifted more students to those sectors, where starting salaries were often higher than in the chip business, engineers say.

 

By rapidly expanding chip education, Purdue is aiming to graduate 1,000 semiconductor engineers annually as soon as possible — up from perhaps 150 a year today

Done