The US Must Choose Between DEI and Advanced Chip Manufacturing. By Matt Cole and Chris Nicholson at The Hill.

Choose one, because even giving money away isn’t enough:

The Biden administration recently promised it will finally loosen the purse strings on $39 billion of CHIPS Act grants to encourage semiconductor fabrication in the U.S.

• But less than a week later, Intel announced that it’s putting the brakes on its Columbus factory.
• The Taiwan Semiconductor Manufacturing Company (TSMC) has pushed back production at its second Arizona foundry.
• The remaining major chipmaker, Samsung, just delayed its first Texas fab.

This is not the way companies typically respond to multi-billion-dollar subsidies. So what explains chipmakers’ apparent ingratitude? In large part, frustration with DEI requirements embedded in the CHIPS Act.

The money has too many stupid strings:

Commentators have noted that CHIPS and Science Act money has been sluggish. What they haven’t noticed is that it’s because the CHIPS Act is so loaded with DEI pork that it can’t move.

The law contains 19 sections aimed at helping minority groups, including one creating a Chief Diversity Officer at the National Science Foundation, and several prioritizing scientific cooperation with what it calls “minority-serving institutions.” A section called “Opportunity and Inclusion” instructs the Department of Commerce to work with minority-owned businesses and make sure chipmakers “increase the participation of economically disadvantaged individuals in the semiconductor workforce.” …

The impetus for the CHIPS Act is that 90 percent of the world’s advanced microchips are made in Taiwan, which China is preparing to annex by 2027, maybe even 2025.

Handouts abound. There’s plenty for the left — requirements that chipmakers submit detailed plans to educate, employ, and train lots of women and people of color, as well as “justice-involved individuals,” more commonly known as ex-cons. There’s plenty for the right — veterans and members of rural communities find their way into the typical DEI definition of minorities. There’s even plenty for the planet: Arizona Democrats just bragged they’ve won $15 million in CHIPS funding for an ASU project fighting climate change. …

No thanks, we’ll go where we can employ talent:

Because equity is so critical, the makers of humanity’s most complex technology must rely on local labor and apprentices from all those underrepresented groups, as TSMC discovered to its dismay.

Tired of delays at its first fab, the company flew in 500 employees from Taiwan. This angered local workers, since the implication was that they weren’t skilled enough. With CHIPS grants at risk, TSMC caved in December, agreeing to rely on those workers and invest more in training them. A month later, it postponed its second Arizona fab.

Now TSMC has revealed plans to build a second fab in Japan. Its first, which broke ground in 2021, is about to begin production. TSMC has learned that when the Japanese promise money, they actually give it, and they allow it to use competent workers.

TSMC is also sampling Germany’s chip subsidies, as is Intel.

Intel is also building fabs in Poland and Israel, which means it would rather risk Russian aggression and Hamas rockets over dealing with America’s DEI regime. Samsung is pivoting toward making its South Korean homeland the semiconductor superpower after Taiwan falls.

 

 

The US lost, is declining and becoming second rate under the burden of woke ideology. Losers:

In short, the world’s best chipmakers are tired of being pawns in the CHIPS Act’s political games. They’ve quietly given up on America. …

For instance, chipmakers have to make sure they hire plenty of female construction workers, even though less than 10 percent of U.S. construction workers are women. They also have to ensure childcare for the female construction workers and engineers who don’t exist yet. They have to remove degree requirements and set “diverse hiring slate policies,” which sounds like code for quotas. …

No wonder Intel politely postponed its Columbus fab and started planning one in Ireland. …

This is the stuff declining empires are made of. As America pursues national security by building a diverse workforce, China does it by building warships.

The CHIPS Act’s current identity as a jobs program for favored minorities means companies are forced to recruit heavily from every population except white and Asian men already trained in the field. It’s like fishing in all the places you aren’t getting bites.

I used to work in the chip industry, in Silicon Valley, for KLA. At that stage KLA was only a few hundred people. All the research staff were white and Asian, mostly men. Some of the techs were Hispanic, and the only black was the janitor. As it happened.

That might upset the DEI ideologues, but the reality is that chip building is intellectually demanding. All the research staff had PhD’s, mostly from highly ranked schools.

Imagine building a national football team on a DEI basis. Now imagine trying to attract a sports franchise to your city, but insisting they follow DEI when selecting their players. Now imagine trying to attract the world’s most advanced manufacturing to your country, but demanding they hire by DEI.

TSMC is in Taiwan. Their value lies not so much in the facilities, but in the people. You could fly the 5,000 engineers out the moment China attacks, and recreate TSMC elsewhere.

Like dumb cargo cultists, our politicians think it’s the building and machines that matter.

As for Australia, we don’t have a chip industry. KLA’s sales to date in Australia: zero.