Planned investments in US chip manufacturing capabilities worth more than $200 billion face delays due to regulations contained in the nation’s CHIPs and Science Act, a Counterpoint Research analyst warned.
Research analyst Matthew Orf noted in a blog published late last week companies including Intel, Samsung, TSMC and Micron Technology pledged to boost US manufacturing after the nation included $52 billion in incentives in the CHIPS Act, which aims to bolster the domestic semiconductor market.
But Orf argued “red tape and regulations” could postpone efforts to bring new manufacturing facilities on-stream: “while the CHIPS Act has lit the flame under private companies to act, some of the legislation’s provisions and shortcomings could lead to its undoing”.
Delays in passing the legislation reportedly already had a knock-on effect on some companies’ plans.
The Counterpoint Research analyst noted factories which get up and running could face a shortage of skilled staff “for years to come” despite government funding for training.
Perhaps ironically given the legislation’s goal of boosting the US’ presence in the global semiconductor market, Orf suggests one solution to the staff shortage “would be to raise the number of visas available for skilled workers from abroad”.
Orf added bolstering US talent might require greater assistance for students “pursuing degrees in related fields”.
Even then, Orf noted the typically higher cost of production in the US compared to other global markets could ultimately hamper the effectiveness of the CHIPS Act: “labour costs and regulations make production in the US more expensive”, he wrote, citing union-arranged pay brackets and childcare fees as examples.
While Orf backs the legislation as “a major stepping stone to creating secure, resilient supply chains” for the US, he notes “more must be done” to ensure the fresh manufacturing push does not fizzle out after the initial thrust.