President Biden took part on August 9th to sign the “CHIPS and Science Act” to help change the landscape of computer chip manufacturing across the globe. While stocks responded with a small plunge in price, President Biden hopes to use the $52 billion in taxpayer funds to get computer chips manufactured in the U.S. once again.
The timing of his signature going across this act is certainly suspicious. Speaker of the House Nancy Pelosi just came back from a tour of Asia with several other congressional delegates in tow, with the goal of getting more information about computer chips to decide on supporting this act. What’s even funnier is the massive investment Pelosi’s husband had made into NVIDIA computer chips recently, too.
With members of congress surrounding him (as well as Pelosi), and representatives of chip manufacturers there as well, Biden signed the bill to hand over this kind of cash into a now cash-poor industry. Even as organizations like Micron Technology which make memory chips, committed to spending $40 billion in the U.S .to create 40,000 jobs, many other chip stocks plummeted.
Idaho-based Micron threw a water-soaked log on the celebratory fire, as they announced their fourth-quarter sales would come in at the low end of their predictions, if not well below it. Their original forecast was for $9.1 million, part way through they had lowered that expectation to $7.2 million.
This set off the drag for other chip manufacturers to follow. The Philadelphia Semiconductor Index keeps track of some of the chip-making companies like Micron, Intel, Nvidia, and Taiwan Semiconductor Manufacturing Co, which reported a 4.6% plunge after the announcement.
Micron’s warning looks to not only influence the poor performance of other manufacturers, but it’s a direct reflection of the current economy. Companies are finally getting their computer chips again. The massive demand and delays in filling that demand are dropping steadily. From TVs to automobiles to cell phones, everyone is beginning to get their needs met. This makes any demand for U.S. chips drop significantly.
As their signature logo represents, Democrats are quite often nothing more but a bunch of stubborn jackasses. They refuse to read the room, comprehend the situation they have put themselves in, or even understand the simple economics of their plans. Rather they expect the American people are going to be fooled by a simple “positive” headline, and not see the waste that this is.
Simply put, American production will not be able to compete with or beat Asia at this point. After years of losing the market to them as American production was far more expensive, we as a nation became reliant on Asia. While COVID showed the country that we cannot rely on others, this is an industry where there is little to no opportunity to be profitable in this economy.
The $280 billion in U.S. research and development is something Biden and those who joined him believe will help solidify the U.S. technological status against Asia, specifically China. With Congress taking a long time to pass this act, it frustrated many chip manufacturers who claimed this money would help fund U.S.-based projects.
The one glowingly positive point is the clause that prevents companies from expanding their manufacturing of advanced chips in China if they receive U.S. subsidies.
Calling it “a once-in-a-generation investment in America itself,” Biden thinks this really will create lots of American jobs and sustain them. Ultimately, it’s not something that is going to save the farm for Americans. Rather, this is just putting a band*aid on something that needs stitches. Long term, this will likely cause more problems than it will solve – especially since it will take so long to open new plants or re-open plants that have been closed for years.