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this is taylor texas and it might feel
like we're in the middle of nowhere but
we're only about a half hour outside of
one of america's biggest boom towns
austin taylor only has about 17 000
people and the downtown has shrunk in
recent years but that's about to change
because of a huge investment samsung has
chosen taylor texas as the site
of his new state-of-the-art
semiconductor
chip fabrication plant last fall samsung
the world's largest semiconductor maker
announced it would build a 17 billion
dollar chip fabrication plant or fab in
taylor creating more than 2 000 jobs
and samsung isn't alone
intel texas instruments and tsmc are
also returning their chip manufacturing
to the us
these companies were learned by new
state and local subsidies and they could
soon receive even more money from the
federal government to be able to say
made in ohio
made in america
is what we used to always be able to say
25 30 years ago that's what this is
about america has long been losing
ground in the race to make chips that's
fueling bipartisan concerns about our
reliance on those made abroad and that's
the problem because semiconductors are
basically the foundation of modern life
they're in your car they're in your
phone your laptop and even your washing
machine but thanks to the pandemic chips
have become harder to find
the pandemic led to a spike in global
semiconductor sales
and that led to product delays for
consumers and highlighted a growing
problem america isn't anywhere near
making as many chips as it needs i sat
down with samsung executive john taylor
at the company's austin campus how big
is that plant going to be you know we've
got 1200 acres and taylor so we're gonna
construct six million square feet of
buildings the capacity that we're going
to bring online in taylor is is really
going to help us give a lot of
opportunity to our customers and also
help us to contribute to the stability
of the semiconductor supply chain
problem to woo samsung local and state
governments offered a slew of financial
incentives the city of taylor and
williamson county offered 90
property tax breaks for the first 10
years
the state of texas threw in 27 million
dollars of its own in return samsung
offered to make donations to local
schools and guaranteed career help for
taylor students
but some have questioned if subsidies
should even be necessary we are debating
legislation
to provide some
53
billion dollars
in corporate welfare with no strings
attached
to the highly profitable
microchip industry
samsung is one of the world's most
valuable companies it's worth around 388
billion dollars so we're a few miles
from downtown austin here downtown
austin is full of cranes big tech
companies coming that aren't getting
subsidies they're bringing jobs here and
they're not asking for anything in
return
why do you need subsidies in order to
build this plant and taylor if it's a
great business opportunity why not just
build it i think the incentive packages
certainly lure a lot of top companies
here it makes it a competitive advantage
not only country to country but just
within the states texas and williamson
county and the city aren't the only
areas that are offering incentive
packages certainly other places that we
look did the same
everybody would like to be able to get
these type of projects again in their
area because they can see the economic
development that will happen and that's
generational development too this is not
just short-term it's really a long-term
investment
samsung recently broke ground on the
taylor site and the company said its fab
would be up and running by the end of
2024.
james lewis is a technology and public
policy researcher at csis a dc think
tank the countries we have to worry
about are
china china basically china what happens
to
the american economy or to the american
consumer's ability to buy things if
china decides that they don't want
taiwan shipping quite as many chips to
the u.s if china would decide to cut off
supplies from taiwan of semiconductors
it would the global economy in
1990 the u.s and europe produced more
than 75 percent of the world
semiconductors now they produce less
than a quarter japan south korea taiwan
and china are squeezing out the west if
those trends hold by 2030 china will
become the world's largest chip maker
are there any examples from history of
america ramping up production of
something like semiconductors and being
able to displace some of those imports
you know the idea that um
we would use a policy solution to
increase production is not a new one and
it's industrial policy which used to be
a dirty word in washington now you can
say it the railroads
um airplanes spacecraft and
semiconductors themselves all these grew
out of government investments america
invented these chips
and federal research and development led
to the creation of these chips
taxpayer dollars over 30 years ago
america had about 40 percent of global
production
but since that time something happened
american manufacturing
the backbone of our economy got hollowed
out
in the past the u.s didn't have federal
incentives for chip making on the other
hand asian countries typically offer
cheap land to chip makers and subsidize
manufacturing equipment that's one of
the reasons that our share of chip
manufacturing has declined everyone else
subsidizes we don't
the chinese in particular have been
willing to dump
tens of billions of dollars into
subsidies and so everyone has figured
out this is a strategic industry
government can play a role by
accelerating investment in it the biden
administration and congress have set in
motion legislation to provide funding to
stimulate investment in the u.s
in june the senate approved 52 billion
dollars in direct subsidies for new
semiconductor factories the house has
yet to take action don't think of
dollars think of aircraft carriers you
want a fab that's two or three aircraft
carriers right we're talking huge
investments to build these things and by
comparing it to an aircraft carrier
you're comparing it to national defense
you're saying this can be as valuable
for us as another aircraft carrier in
fact it's more valuable for us chips are
more valuable for us than another
aircraft carrier it's the chips industry
that is now underpinning the whole
digital economy in march the ceos of
major semiconductor companies testified
at a senate hearing about the chip
shortage they also encourage lawmakers
to pass the chips act in 1990 80 percent
of semiconductors were built in u.s and
europe today 80 percent is in asia with
only 12 percent in the u.s and half of
that being intel
asian countries moved aggressively to
attract this industry with strong
incentive policies assuming we receive
support from the chips act the total
investment from the site could grow to
as much as 100 billion over the next
decade we've also thrown our factory
doors open wide to provide capacity for
us and global foundry companies we seek
to rebuild the entire supply chain on
u.s soil one thing is for sure the chip
shortage is far from over last month
intel chief gelsinger said the shortage
would extend into 2024 or beyond
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