CHIPS and Science Act: America’s Tech Revolution Unleashed

welcome to another deep dive and today we're going to be tackling something pretty massive um the haps and science Act of 2022 and to help us break it all down we have well a Bonafide expert on all things cgps um I got to admit the sheer scale of this thing is a little intimidating $280 billion yeah so maybe we could start with like a like a highlevel overview what's what's the point of this act yeah no it's it's definitely a big one and I think it shows how uh how seriously the US is taking the future of technology so the cats act sometimes called cats plus it's basically a plan to boost American Research and Manufacturing especially for semiconductors and it wants to make America less reliant on on other countries for these these parts that are in basically everything nowadays especially with that Global shortage that's that's been impacting everything from Cars to to smartphones right yeah it seems like Supply chains are are on everyone's mind these days so okay so it's about Shoring up that supply chain and and making sure the US stays competitive in in Tech globally and I've heard that the chps ACT wasn't always one thing like it was emerging in two separate bills the endless Frontier Act and the GPS for America Act is that right yeah yeah that's right it's it's an interesting bit of history there both those bills that that ended up forming the TPS and science act were actually really influenced by under Secretary of State Keith cratch yeah he had this idea for for a team of of Allied Nations he called it uh techn democracies 10 or td10 for short and they would invest in technology to kind of counter China's influence and both of those bills and I guess this G GPS act that came from them they really embody that that vision of tech alliances so it's not just about domestic policy it's also about global Partnerships huh interesting okay so before we get into like the nitty-gritty of the ACT I think it's important to like really understand why semiconductors are so important like I get that they're in everything these days but why why all the futs they're like they're like the tiny brains behind all our Tech you know your phone your laptop even your car they all need these chips to work they're at the heart of everything you know from artificial intelligence to to all that advanced manufacturing stuff and and the shortage we've seen really shows just how vulnerable we are when we rely on other countries for them so the GPS Act is is trying to address that that vulnerability Yeah by getting domestic production up and running how how's it going to do that so the ACT puts aside a massive amount of money 52.7 billion specifically for that 39 billion of that is for building new factories like right here in the US yeah and they're giving a 25% investment tax credit to encourage companies to buy manufacturing equipment wow that's that's pretty enticing so so it's more than just building factories though right yeah what about the the research side you know and development and all that absolutely yeah the ACT has 13 billion set aside for R&D and semiconductors and also for Workforce training you know at the end of the day we need people who can actually design manufacture and run all these these Advanced facilities oh right yeah you need you need the people to make it all work okay so we've talked about the us trying to counter China's influence in Tech so how does the ggps act like directly address that well one of the one of the key things it does is it bans companies that receive subsidies from making Advanced chips in China or Russia for 10 years it's a pretty clear message that the US is is committed to Bringing its semiconductor industry back home and not relying on well potentially hostile countries Okay so we've covered the semiconductor Focus but the name is kgps science act what about that science part what are areas is the act looking at yeah so that's that's where it gets really interesting it's got a total of 174 billion dollar for all sorts of scientific advancements and research we're talking space exploration with funding for the International Space Station and and NASA's Artemis program you know the one that's trying to get people back on the moon and there's funding for Quantum Computing biotechnology Clean Energy Technologies a whole bunch of stuff wow okay it's it's it's very broad it even focuses on stem education and Workforce diversity trying to get more people into those fields it sounds almost too good to be true well there had to be some some challenges in getting all of this done right oh of course yeah there's definitely there's excitement and we're already seeing some project announcements but but it's not all going to be easy so what what are some of the the hurdles they're facing well you know people are going to criticize the cost $280 billion is a lot of money and unsurprisingly China's been lobbying against it plus there's just the the logistical challenges of implementing something this big you know people are worried about bureaucratic delays and actually getting that funding to the to the right places so even with the best intentions it's it's just a massive undertaking yeah exactly and then there's the concern about a potential semiconductor glut some experts are saying that with all this investment we could actually end up with too many chips in the future wait really I thought the whole point was that there weren't enough it's it's more complicated than that if if the supply gets way bigger than the demand the prices could crash and companies might not be able to make their money back and that could lead to job losses and less Innovation so it's it's all about balance okay so so finding that sweet spot is really important what what else is on people's minds any other concerns one of the big ones is is the workforce the US doesn't really have enough skilled workers in the semiconductor industry and that could really slow things down we just don't have enough engineers and technicians to meet to meet the demand so it's not just about the factories it's also about the people to run them how are they how are they trying to solve that well the ACT has some stuff for Workforce training but that takes time in the short term we're seeing some interesting workarounds like tsmc is actually sending American workers over to Taiwan to train because there just aren't enough people here who can do it wow that that really shows just how big of a problem it is okay so besides the workforce shortage are there are there any other worries there's the environmental impact you know making chips uses a lot of energy and water and there's the question of worker Protections in these new factories and people are worried that companies might just use the money for stock BuyBacks instead of actually investing in production and jobs so it's about making sure everyone benefits not just not just the corporations exactly we need to make sure the Shipps act leads to a future where where everyone's better off both economically and in terms of sustainability it's amazing how something as as specific as semiconductors can have such a such a wide impact it's true and and we haven't even talked about the international side of it yet there's more okay well let's let's get into that then what about the global collaborations well it's it's really interesting to see how all of this is playing out in the real world you know we can we can talk about strategies and Global competition But ultimately the success of the chips Act is going to depend on how it affects actual businesses and and the people working in them right yeah let's let's get into those real world impacts then what are some of the the companies that are making big moves because of the shps app we're seeing a lot of action both with with big companies and smaller ones they're all they're all betting big on us chip manufacturing uh take tsmc for example they're building these two huge chip fabrication plants in Arizona a project worth over $40 billion and the cheap PS act incentives are are definitely a part of that they're even flying American workers to Taiwan for training to to try and address that skills Gap so it's it's helping to spread the knowledge around what about what about us companies are they getting involved oh yeah absolutely Intel they're a big name in semiconductors and they've announced this massive new chip manufacturing complex in Ohio it could end up being worth up to a hundred billion do which would make it one of the largest private investments in US history wow that's that's a huge commitment any any other big players jumping in yeah so Samsung the South Korean tech company they're building a17 billion semiconductor Factory in Texas and Micron Technology they've announced a$2 billion investment in a new chip factory in New York and they're even thinking but expanding that to 100 billion over the next 20 years so so companies are putting their money where their mouth is even before they see any government money that's got to be a good sign right it is yeah it seems like the private sector sees sees the potential in in US semiconductor manufacturing for the Long Haul and these big Investments are having a ripple effect you know they're attracting small suppliers and specialized companies to to set up shop in the US too so it's creating a whole ecosystem right yeah but but what about those those implementation challenges we talked about are are companies actually getting the funding they need are these projects on track that's that's where things get a bit tricky you know there's a lot of enthusiasm a lot of investment but but the roll out has been slower than people expected what's what's causing the delays one of the biggest problems is that Grant approvals are just taking a long time the process is is really bogged down by bureaucracy and and just the sheer complexity of these projects so only a few companies have actually received funding so far and a lot of projects are facing delays so it's like a a hurry up and wait situation yeah pretty much and it's it's causing some frustration for companies you know they're they're eager to get started these delays are costing the money and creating uncertainty are are the delays so bad that companies might just give up on investing in the US most of them seem committed but if the delays go on too long it could it could make people lose confidence in the ghps act and and that could put some projects in Jeopardy you know time is money so what's what's being done to speed things up well the government knows it's an issue and they're they're trying to streamline the process they're hiring more people to evaluate applications they're clarifying the guidelines and they're trying to communicate better with companies and and that environmental Bill we talked about that's supposed to help speed up the permitting process so so cutting through the red tape is a is a top priority it has to be but even if the funding starts flowing faster there's still that Workforce shortage problem it's a major bottleneck right we we talked about that but but how is it actually affecting these companies in their projects well look at tsmc again they're having trouble finding skilled workers in Arizona especially people who have experience in advanced chip manufacturing it's it's actually causing delays in their construction schedule they've had to bring in workers from Taiwan and they're rushing to train local workers so so even with all the money and and political support finding enough qualified people is is a huge challenge it is yeah and it really shows how important it is to invest in Education and Training to get more skilled workers that's a key part of the sheeted PS act but but those things take time so so what are what are companies doing in the meantime they're having to get creative they're offering higher salaries signing bonuses relocation packages anything to attract talent and they're investing in their own training programs and partnering with local colleges and universities to develop specialized courses so they're they're trying to build their own Talent pipelines exactly are there are there any examples of those Partnerships between industry and Academia yeah so Purdue University they're a top engineering school and they've started a whole semiconductor degree program it's the first of its kind in the US and it's specifically designed to meet the growing demand for skilled workers in this field that's that's pretty proactive yeah but but beyond those immediate challenges are there any any broader concerns about how the CPS Act is being implemented well one concern is that there could be unintended consequences some experts are worried that all this Government funding could actually distort the market and lead to overc capacity you mean you mean like too many companies rushing to build chip factories and then we end up with too many chips exactly yeah if that happens prices could drop and companies might not make their money back and that could lead to job losses and slow down Innovation so it's it's a delicate balance so so policy makers need to be careful not to create a like a boom and bust cycle absolutely they need to be strategic about how they allocate funding and they need to keep a close eye on what's happening in the market what about what about environmental concerns we know making chips uses a lot of resources are people worried about the environmental impact of all this domestic production it's a valid concern yeah chip fabrication uses a lot of energy and water and it produces hazardous waste some critics say that the Chups act doesn't do enough to address those environmental issues so so how can we make sure that the semiconductor industry grows in a sustainable way there are there are things that can be done some companies are already trying to reduce their environmental impact you know by investing in renewable energy being more efficient with water and looking into waste recycling and the government is offering incentives for companies to adopt those kinds of environmentally friendly practices so it's about making chip manufacturing cleaner and Greener exactly and it's not just about being altruistic it makes business sense too you know younger workers and investors they're they're more and more attracted to companies that are committed to sustainability right it's it's becoming clear that being environmentally responsible is not just the right thing to do it's also good for business but what about what about the workers themselves are are there concerns about working conditions and wages in these new chip factories that's something that labor unions and worker advocacy groups are are keeping a close eye on there's there's a worry that the rush to to build these factories could lead to a race to the bottom you know with companies cutting corners on wages and safety to save money so what about making sure the workers benefit from all of this not just the the companies and shareholders that's right the ches ACT does have things in it that encourage Fair wages good benefits and safe working conditions and it encourages companies to work with labor unions and and adopt responsible labor practices so it's about creating a situation where everyone wins both the the companies and the workers exactly but it'll take it'll take ongoing dialogue and collaboration between the government the industry and the labor unions to make that happen this whole chts act seems like a really complex initiative with with a lot of different things to consider it is yeah it's it's a bold undertaking and and putting it into practice is a complicated process there will be challenges but but there's also a lot of optimism that it can really transform the US economy and and put the country back in the lead when it comes to Future Technologies I'm sure a lot of people are are watching to see how it all plays out both here in the US and around the world we've talked a lot about the domestic side of things but but let's let's shift gears now and talk about the international aspects of the GPS act how is it affecting us relationships with allies and Rivals this is where it gets really interesting you know the global side of things we talked about the chps act as a way to to kind of push back against China's influence but how's it actually affecting relationships with with other countries yeah who who's the US teaming up with on this well it's definitely strengthening ties with with key allies who are also worried about about China's dominance and semiconductors we already mentioned the us working with India but but there are other big examples too okay so so who else one of the most important ones is with Taiwan you know that's where tsmc is based they're the biggest and most advanced contract chip maker in the world the US has been working really closely with Taiwan to to protect their semiconductor industry and to encourage them to invest more in US manufacturing tsmc's decision to build those huge plants in Arizona that's that's a major win for the US and and a sign that they're cooperating more closely so so it's not just about the economics it's it's strategic too yeah exactly the US sees taiwan's semiconductor industry as as really important to its own National Security and then there's South Korea another big player in the global chip Market the US has been trying to strengthen ties with them too both in terms of production and and research and development and and that's where Samsung's new Factory in Texas yeah fits in exactly yeah Samsung's investment shows that the the economic ties between the US and South Korea are getting stronger and the CHS Act is definitely playing a role in that and and it's not just about manufacturing the US and South Korea are also collaborating on on research and things like artificial intelligence and Quantum Computing it sounds like a pretty broad partnership are there any other any other important countries involved in all of this yeah so European countries like like the Netherlands and Germany they're important too they're home to some key suppliers of of the the equipment that's used to make semiconductors the US has been working with them to to control exports and to prevent China from getting access to to sensitive Technologies so so it's about creating a united front against China but but how is China reacting to all of this they're not happy about it they see the GPS act as as the us trying to hold them back technologically and and maintain its own dominance in the global economy so so it's making the Rivalry between the US and China even more in yes it is yeah China's accused the US of of protectionism and trying to stifle their Innovation they've said they'll retaliate both with with economic measures and by investing heavily in their own domestic semiconductor industry sounds like a pretty high stakes competition it is yeah the cheapest Act is just one part of this this bigger competition between the US and China for leadership in in artificial intelligence Quantum Computing 5G all these technologies that are going to be really important in the future whoever wins this rivalry it's it's going to have a big impact on the global balance of power so it's not just about chips it's about it's about who's going to shape the future yeah okay so so bringing it back to the GPS act what are some of the the early successes and challenges that we're seeing with these International collaborations well one of the early successes is that more and more foreign companies are investing in US semiconductor manufacturing like we said tsmc Samsung they're all building new factories in the US and the gpsx incentives are a big part of that so so it's bringing in foreign investment and expertise it is yeah and that's helping to bring the US semiconductor industry back to life but one of the challenges is is coordinating policies and regulations across all these different countries the semiconductor industry is global so trying to to harmonize regulations and standards especially when National Security is involved can be really difficult so finding that balance between between working together and protecting national interests is is key absolutely and then there's the issue of trust with with all the tension between the us and China some countries are worried about about getting too close to either side so so the chps ACT is is operating in a very complex geopolitical environment it is yeah and those Dynamics make it harder to to create a truly Global and Cooperative approach to semiconductor production and Innovation but but even with those challenges there's there's definitely a feeling that the chps ACT is creating some momentum for international collaboration in this this really important industry it sounds like it's it's still work in progress with both both both opportunities and obstacles that's a good way to put it the CPS Act is a bold experiment and it's it's too early to say if it's going to achieve all of its goals but it's definitely shaken things up in the global semiconductor world and and it's set in motion some really significant events this has been a really fascinating conversation I've learned so much about the cheps ACT its goals its challenges and and how it could potentially impact the world any any final thoughts for our listeners I think it's important to remember remember that that semiconductors are really at the heart of the 21st century economy the the chips that are in all our devices they're essential to to Modern Life and the countries that control the production and the innovation of those chips they're going to have a big advantage in the years to come so so it's not just about the economics it's also about National Security technological leadership and and the future of innovation exactly yeah the cheat PS Act is just one piece of a much bigger puzzle it's a story that's still unfolding and it's one that everyone should be paying attention to well thank you so much for joining us today and and sharing your expertise on this this really complex and fascinating topic it was my pleasure and to our listeners thank you for joining us for this deep dive into the chips and science act we hope you found it informative until next time keep exploring keep learning and keep asking those big questions

2024-11-11 06:34

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