Yves here. This post illustrates a pet theme of ours: how in complex systems, trying to map a simple path through them often makes things worse. A big reason why is that the parties trying to hack their way through what amounts to a jungle don’t even have a map of the terrain. Protectionism is a case in point.
Development economists have found that erecting various market barriers and providing support to young but high-priority industries can indeed succeed in having them grow big enough to survive global competition. But the US is allergic to industrial strategy even though it wants dirigiste-looking results, namely rebuilding our hollowed-out industrial base and defending, better yet improving, our standing in advanced technologies. The fact that we’ve been unable to increase production of 155 mm shells, and are dependent (per Alexander Mercouris) on a single factory in Poland for TNT (later gen less nasty explosives have proven to be too difficult to produce to date) shows a remarkable failure of planning. Yet that seems to be endemic in a world of MBAs whose brains have been addled by PowerPoint.
By Mehmet Canayaz, Assistant Professor of Finance, Smeal College of Business, Penn State University; Isil Ere, David A. Rismiller Chair in Finance, The Ohio State University; and Umit Gurun, Stan Liebowitz Professor of Finance and Accounting, University Of Texas at Dallas. Originally published at VoxEU
The US aims to revitalise its domestic semiconductor manufacturing industry, but will there be enough skilled workers to meet the ambitious goals? This column presents evidence, based on a global dataset of 1.6 million employees with chip manufacturing skills, that US protectionist policies – increased tariffs and visa restrictions – implemented since 2018 may have undermined the very workforce the industry needs to thrive. The number of US students graduating with skills relevant to chip manufacturing has decreased, and US chip manufacturing firms reduced hiring, especially for entry-level and junior positions.
As the US aims to revitalise its domestic semiconductor manufacturing industry through initiatives like the 2022 CHIPS and Science Act, a critical question looms: will there be enough skilled workers to meet the ambitious goals? In a recent paper (Canayaz et al. 2024), we present new evidence that protectionist policies – increased tariffs and visa restrictions – implemented since 2018, ironically, may have undermined the very workforce the industry needs to thrive.
The semiconductor industry sits at the intersection of national security and economic competitiveness. Recognising this, policymakers have sought to bolster domestic chip production through measures like tariffs, immigration restrictions, and subsidies. However, our analysis reveals that these efforts have had unintended consequences on the industry’s most vital resource: its talent pool.
Building on earlier work examining the broader economic impacts of trade frictions (Fajgelbaum et al. 2020, Amiti et al. 2019), we focus specifically on how protectionist policies have shaped the semiconductor workforce. Our findings paint a concerning picture of declining domestic hiring, especially for entry-level positions, and a shift in career choices away from the chip industry.
Using a comprehensive dataset of 1.6 million employees with chip manufacturing skills worldwide, we employ a difference-in-differences methodology to analyse employment trends before and after the implementation of protectionist measures in 2018. Our study examines both US semiconductor firms and the educational and career trajectories of individuals with relevant skills.
The results are striking. We find that US chip manufacturing firms experienced a 9% reduction in hiring activities and a 3% decrease in overall workforce size for science and engineering positions compared to other job categories within the same firms. This translates to an annual loss of 2,285 science and engineering positions in the US chip manufacturing sector. Between 2019 and 2022, this amounts to a cumulative reduction of 9,140 jobs in an industry that employed 66,382 engineers and 9,768 scientists during this period.
The decline in hiring is particularly acute for entry-level and junior positions, indicating that protectionist policies have disproportionately affected those new to the workforce. This trend is especially concerning given the industry’s need for fresh talent to drive innovation and growth.
Furthermore, our analysis of educational cohorts reveals a significant shift away from chip manufacturing careers. We observe a marked decrease in the number of US students graduating with skills relevant to chip manufacturing. In 2017, there were 65,290 undergraduates and 39,019 postgraduate students in relevant programmes. By 2022, these numbers had plummeted to 12,311 and 20,503, respectively.
We find that US semiconductor firms have responded to these challenges by increasing their recruitment of experienced workers outside the US. There was a 3% increase in hiring for both junior and mid-senior roles in international segments of these companies. Countries benefiting from this shift include Canada, which strategically amended its immigration policies to welcome more foreign engineers and scientists, as well as European nations with established chip manufacturing industries, such as the Netherlands.
These findings have profound implications for the success of initiatives like the CHIPS Act. The Semiconductor Industry Association (2023) projects a need for 115,000 new semiconductor jobs in the US by 2030. Based on our estimates, it could take approximately 16 years to fill these positions at current graduation rates. This talent shortage could seriously impede the industry’s growth and the US’s ability to achieve semiconductor self-sufficiency.
Our research underscores the relationships between trade policies, immigration, and workforce development. While protectionist measures were intended to boost domestic manufacturing and employment, they appear to have had the opposite effect on the semiconductor industry’s talent pipeline. Recent research by Bosone et al. (2024) shows that geopolitics began significantly affecting global trade after 2018, aligning with the US-China tariff war and coinciding with the timeline of our observed talent crunch in the semiconductor industry. Their study also found evidence of ‘friend-shoring’ in trade patterns, suggesting that geopolitical considerations are reshaping not only supply chains but, potentially, talent flows as well, further complicating the semiconductor industry’s access to global skill pools. This highlights the need for a more thoughtful but fast approach to industrial policy that considers the global nature of the semiconductor workforce and the importance of maintaining open channels for talent acquisition and development.
To address these challenges, policymakers could consider several key actions:
- Re-evaluate immigration policies: Implement targeted visa programmes, such as the proposed ‘Chipmaker’s Visa’, to attract and retain international talent in the semiconductor industry.
- Boost domestic STEM education: Increase investments in educational programmes and initiatives that encourage more domestic students to pursue careers in chip manufacturing and related fields.
- Foster industry-academia partnerships: Encourage closer collaboration between semiconductor companies and universities to ensure curriculum alignment with industry needs and provide more internship and research opportunities.
- Develop retraining programmes: Create initiatives to help workers from other industries transition into semiconductor manufacturing roles, tapping into a broader pool of potential talent.
- Incentivise talent retention: Implement policies that make it more attractive for skilled workers to remain in or return to the US, such as tax incentives or student loan forgiveness programmes for those who commit to working in the domestic semiconductor industry.
- To bridge the talent gap and secure a long-lasting competitive edge in chip manufacturing, prioritise investments that integrate AI into this sector. Coordinate the proposed ‘Chipmaker’s Visa’ programme with supplementary initiatives that link chip manufacturing and AI development.
The success of America’s semiconductor renaissance hinges not just on building new fabrication plants (‘fabs’) and securing supply chains, but on cultivating and sustaining a skilled workforce. Our research serves as a cautionary tale about the unintended consequences of protectionist policies on talent development and retention. As the global competition for semiconductor supremacy intensifies, the nation that best nurtures and attracts top talent will likely emerge as the leader in this critical industry.
The path forward requires a delicate balance between promoting domestic capabilities and maintaining the global interconnectedness that has long been a hallmark of the semiconductor industry. By addressing the talent crunch head-on with targeted, forward-thinking policies, the US semiconductor industry can work towards realising the full potential of its ambitions and securing its technological leadership for decades to come.
See original post for references
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I’ve worked in semiconductor companies in USA for 25 years, and I have estimate that 80% of the fab staff (engineers, technicians) were not born in USA. The recent TSMC build in Phoenix failed because they couldn’t get the staff.
The people proposing this strategy surely know this, so some other play is going on.
I mean, its easy to find the reason why there is no homegrown semiconductor technicians:
https://www.bls.gov/oes/current/oes519141.htm
Mean average salary: 48k
Teaching pays you more for a STEM background.
A lot of this is the decades-long game of using H1Bs to keep down domestic technology salaries, in both industry and academia. Plus of course the extensive offshoring, where you train a foreigner to take your job. This will not change and the best and brightest will keep taking up careers in law, medicine, accounting and finance (many people with EE and Physics degrees in finance!).
Without the constant use of H1Bs and offshoring, STEM salaries in the US would be significantly higher and therefore incentivize people more to take STEM careers. For the benefit of short term profits and reduced costs, both corporations and universities have reduced the incentives for STEM graduates.
does China’s layered 3-D chip approximate quantum computing abilities? Or is there additional technology required to somehow employ entanglement? where is this industry heading? And how fast is simply too fast in this otherwise plodding world?
Yep, my question. No doubt “innovation and growth” are the magic incantations mainstream economists and politicians invoke. Both often translate to unmanageable complexity and cancerous processes. Already we humans have gotten way out over our skis in both areas, and more-of-the-same is only about greed bubbles and attempts to achieve dominance and hegemony. Bell Labs did both, with a strong dollop of stability, until killed off. So we have cell towers and no copper wires, huge pron demand eating the bandwidth, mass surveillance and manipulation. Serving basic human needs? Not so much, or only as unintended “features.”
But Competition is the watchword, with Profit the subtext, so ever more instability and vulnerability will get built into all the systems of systems, and little shocks like the CrowdStrike event will proliferate. So much of it built on “legacies” written in languages no longer understood. Anyone preaching any kind of homeostatic notions gets squashed.
How much is ever enough?
No, IIUC, that is an elaboration of existing tech (that resolves heat dissipation issues) whilst QT is something totally different.
>does China’s layered 3-D chip approximate quantum computing abilities?
An interesting question! Layered 3D chips are stacked transistors, mainly done to save space on a chip, and increase speed, and lower cost and power use. Currently I don’t think anyone is investigating quantum computing that might result from these specific transistor technologies, though quantum effects are important in integrated circuit design. You would think anyone interested in quantum computers would be investigating these effects, and maybe they are. You’d have to do a literature search to find out. I’m not sure what the key words would be, maybe a general reading on the approaches to quantum computers would reveal if any of them are semiconductor based and that would provide some key words? A quick search on “3D quantum transitors “quantum computing”” suggests that yes, there is work going on here:
Advanced 3D Integration Technologies in Various Quantum Computing Devices
>Or is there additional technology required to somehow employ entanglement?
Maybe not additional technology, a different perspective on what a transistor is actually doing, from a physics view. Engineers and physicists have approached transistors as a stability problem, how to make them reliable? The instabilities that have been eliminated might actually in some cases be due to quantum effects. So looking at transistors differently might suggest new technology to employ entanglement.
>where is this industry heading?
Depends on what their R&D is doing. So far it’s been oriented towards higher transistor density and power reduction (for portable devices). That’s been successful so the industry is probably not looking much outside what they are currently doing. Being engineers and scientists though they may be looking at other possibilities. New science in materials and memory storage could dramatically transform microcontrollers. With lots of fast onboard permanent storage a microcontroller could compute a lot faster and hold many more programs, thus being preprogrammed to do more complex things.
>And how fast is simply too fast in this otherwise plodding world?
A sociology question. In my experience if someone is investigating something they generally make some progress. It can take a lot of investigation to discover the truth, but if no one investigates no progress happens. How fast is too fast for technological change? Was the bow and arrow too fast a discovery? Maybe if it led to widespread war. I guess you have to look at the effects on people. If a new technology causes widespread harm (nuclear weapons, PFOS, ultra-processed foods) then it’s too fast.
Terrific introduction and post here. The folly of Clinton’s disdain for working people that played-out through his idea of China and Mexico as sweat-shops is a horse that left the barn long ago and is galloping across the next county. Good luck recreating the thriving manufacturing industry that I can recall in the Silicon Valley of the ‘80’s and ‘90’s. The buildings all got knocked down and there’s not enough electricity and. water left to serve them if they could be rebuilt.
The “engineering” school (chips/software, not bridges) at the University of California campus adjacent to Silicon Valley is allocated 20 percent of the faculty and physical resources to serve 40 percent of the majors. The state has abandoned funding and the school has been left to chase grants and other crumbs tossed their way by wealthy benefactors. The student demand is there and it might fulfill the need but industry isn’t promising to hire them.
De-industrialization was a folly that continues to swirl our young people down the drain…
IMO, the larger issue is that STEM in the US, from K to 12, stinks at the national level.
And a frontline role on the fab floor is not a what MIT grad is looking for.
the directional land grant schools need to be pumping out more quality STEM grads, but can’t if 12th graders don’t have a STEm foundation.
No royal road to geometry or in the sciences
More people would go STEM if there were financial incentives. That is the main issue.
https://www.bls.gov/ooh/life-physical-and-social-science/biological-technicians.htm
Average salary 51.4k
You can make 50k working retail in the Northeast US.
There is also the misogyny problem. STEM was encouraged for boys and not for women, so now there are too many men with STEM backgrounds controlling education in STEM. This is slowly being corrected but it will take a long time. I worked in education in computer science and the number of women was increasing for a decade or so (mostly women from other countries than the US because those countries recognized that women have STEM abilities more than the US did/does, Romania for example), but now it seems to be decreasing. In part because computer science is increasingly seen as a way to exploit knowledge workers and the job salaries have gone down. Also the work has gotten weird, the people hiring STEM people increasingly have goals contrary to societal good. Also because of xenophobia. But also because women found the environment toxic and just decided the pain wasn’t worth it. We could have much higher numbers of women in STEM jobs if the school and work environment was less toxic. Which would improve the US standing in technology.
The decline in hiring is particularly acute for entry-level and junior positions, indicating that protectionist policies have disproportionately affected those new to the workforce.
This specific point is for me a puzzle. The authors provide no explanation as to the mechanism by which the introduction of tariff barriers on imported products would cause a hiring reduction of junior and entry-level personnel in the USA.
After skimming through the complete paper, it looks as if its “insights” actually derive from a typical approach of quantitative economics: computing regression coefficients on a bunch of parameters — one of them corresponding to the introduction of protectionist measures. That chip manufacturers in the USA reduced their hiring for entry-level positions is an observed effect of the regression, but remains unexplained. In the absence of any plausible mechanism, it could also be that the introduction of protectionist policies and the reduction of hiring are correlated to a third, explanatory parameter which the authors missed.
An interesting aspect regarding the reduction of young people entering electronics studies: it appears to be a worldwide phenomenon (p. 29):
In stark contrast, 58.7% of countries in our sample witnessed a decline in classmates entering science and engineering roles each year.
[…]
Among the significantly impacted, the U.S. and India stand out, with both experiencing reductions of more than 1000
If this is true, India progressing in a development path comparable to China, and the USA rebuilding its electronics industry seem both severely compromised.
While industrial policy is, as indicated in the introduction, a skein that is quite hard to untangle and with paradoxical aspects, this article confirms my accumulated impression on VoxEU: lots of effort on mathematics, weak on substantial insights.
Right. The premise isn’t well explained or is merely a correlation equals causation argument.
This!
I don’t understand the panic. Trump introduces tariffs in semiconductors, to stimulate domestic sourcing. Semiconductor entry-level employment falls. The article advances no hypothesis why A and B are related so it is hard to see why this is proof that tariff barriers to bolster strategic industries are a bad thing.
The big picture is that the US created its semiconductor lead on defence contracts, not on the “free market”. Indeed, it tightly controlled sales of computers to the COMECON (Warsaw pact) economic sphere, so those companies had artificially *small* export markets but a giant loving Uncle Sam as anchor client and US as a domestic market over which to amortise development costs. The Japanese and Koreans stole their markets in volume chips like memory, with state support (MITI etc.) but the US hung on to a lead in CPU’s and SoC’s thanks to the mobile boom and the fall of the iron curtain in Europe and China. That lead in CPU’s is now being eroded by China (Huawei).
The situation in mobile is more striking, the US has been the also-ran in 5G for years because Europe was initially dominant (Ericsson and Nokia) and then Huawei and ZTE etc have aggressively sponsored telecoms research is Europe, posted very good graduate students abroad and then hired them back etc. and patented everything they could think of.
But, rather than the historic picture, this article indulges in some econometric onanism, with a happy ending of pleas for more STEM education, more research grants, more industrial grants (for, you guessed, academic research), more research visas for immigrants and more nebulous “investment” in AI applications. Oh, and that Democrat’s friend: “training”. The only thing missing from this B Ark buzzword bingo was “access”!
If you look at what is happening in the SMO, the chips that are needed for 21st warfare are cheap to mid-range volume chips for “consumables” like drones and small volume esoteric semiconductors for imaging, remote sensing, GPS, electronic warfare, missile guidance etc. Ideally these would be designed in clean rooms, free from foreign backdoors and possibly radiation hardened. They may also use non-silicon semiconductors. That is not a winning proposition for Apple or Nvidia and, as a subset of the market with respect to an industrial policy, not something that mass semiconductor employment figures really speak to….
There are even bigger problems than the education system producing enough engineers nor enough immigrants with a background in semiconductors. That’s what the article seems to focus on.
The education system is a problem, but I have to ask, are the rich willing to pay the higher taxes for a good public education system, both at a primary and university level? Thanks to neoliberal economics, the rich are the only people with the disposable income for this and most Americans live paycheck to paycheck.
What’s the other big problem. The corporate culture of these companies is going to need to change. They spent a ton of money on buybacks of their stocks. They are profit oriented, not oriented to making the best quality products, and short-term profit oriented at that.
https://www.nakedcapitalism.com/2021/07/how-intel-financialized-and-lost-leadership-in-semiconductor-fabrication.html
US taxpayers may very well just end up subsidizing buybacks.
https://www.nakedcapitalism.com/2021/10/does-america-want-a-chips-for-buybacks-act.html
I’ve also heard from Intel employees (and disclosure, I know one colleague who works for Intel) that the company pays below market wages and does not have good work life balance. He only took the job because he was laid off and looking for work. It means that chip design and manufacturing has much less appeal as a career than say, management consulting, finance, or computer programming.
It isn’t just intel – Nvidia last year bought back stock:
https://www.reuters.com/technology/nvidias-25-billion-buyback-a-head-scratcher-some-shareholders-2023-08-25/
In the advertising and software side, Google has been buying back shares, as has Apple (which is a fabless company now like Nvidia).
Imagine this scenario:
US taxpayer subsidize the chip making companies, only they don’t spend a high percentage of the subsidies on capital expenses, research, and higher wages for staff, while buying back shares. Congress is corrupt enough to sign off on that via lobbyists and campaign contributors. Meanwhile, they use PR to pretend like they are “doing something”. This sounds like the most likely outcome to me.
This will in the short run lead to a bubble in the stock market, but in the long run, nations like China will overtake the US in advanced technology. That may lead to even that stock bubble collapsing, as US companies, both fabs and fabless companies, struggle to compete.
Recently, there was an interview of TSMC’s former lead scientist, and the popular Twitter influencer Arnaud Bertrand noted that the Chinese have been surpassing the US in semiconductor research papers:
https://x.com/RnaudBertrand/status/1793457614816494011
China has also been spending a ton on capital investment, especially after the US sought to deny China the most advanced tools, most notably ASML’s EUV technology.
This is going to backfire on the US as hard as their sanctions war against Russia. The US hasn’t even begun to look at the real root problems and the rich are too greedy to solve them.
Huawei was paying peanuts to sponsor world class research, often in diamond-in-a-coal-mine departments at second tier institutions, (e.g. Bangor University in optoelectronic telecoms), back in 2012. They were getting a very good return on their money. And this was not a process driven only by Beijing. Many Chinese born academics were happy to relocate to the UK and set up spin-out companies in the UK or China with investment from Chinese local governments, who were equally happy to be doing their bit for the bleeding edge in line with Beijing’s exhortations.
It reflects very poorly on Western corporations and government for not funding basic research more. When I was in high school, one person I knew was a Ph.D in physics, who couldn’t get funding for his blue skies research.
Government spending on research is at historical lows.
https://theconversation.com/federal-funding-for-major-science-agencies-is-at-a-25-year-low-232582
Granted, I live in Canada, but it’s the same story.
The Western private sector won’t do it, as they are more short term profit oriented. There won’t be anything like Bell Labs. They want to spend the money on share buybacks and the like. The reality is that the West is too short term greedy to do it.
By contrast, note how the Chinese companies are willing to spend money on research, even if there is no immediate payback.
Fixing the K-18 education system is not an issue of money, its simply an issue of focus. The focus must be on the basic skills necessary to succeed (reading, writing, arithmetic, maths, science) in an environment of excellence for all and respect for the teaching staff, together with regular PE to burn off youthful energy (especially for boys).
All the other BS of the past decades needs to be tossed, and also the results of “progressive” parenting dealt with. And close all the Schools of Educations and Teacher Training Academies that are run on non-scientifically based theories and the need to have a reason to exist. Simply hire people with the right degrees and have them learn from the senior teachers, instead of being imbibed with so much BS which has nothing to do with teaching.
In the university system, simply returning the number of administrative staff back to the percentage of the 1970s would free up huge amounts of money. And if you fix K-18 you can go to 3 year degrees instead of 4 year degrees, and maybe specialize like the Europeans do rather than waste a year or two of the student’s life learning from mediocre professors teaching a “liberal” education.
Unfortunately, I think the conditions for low cost higher education have gone. In the UK, lower class access to higher education was hard won after WW2, with a social bargain (“We are the masters now”) that the elite universities would admit grammar school boys (state funded) as well as private schhol boys. Over time, this also applied to girls. But the institutions were small, Spartan, institutional (student dorms with communal bathrooms or living out in boarding houses run by war widows) and resembled the chalk dust and lino environments of the students’ schools.
Moreover, the students were either too privileged to really care or too driven to mess around. The former knew that you could walk out of private school at 18 into an entry level job in the City or armed forces or any liberal profession, as articled clerk or accounting trainee or pupil barrister (indeed, my father became a doctor and a surgeon by direct admission to a London teaching hospital for training because he had been taught the wrong chemistry syllabus and failed his Matriculation paper for University. He never had a medical degree, despite practising in the cutting edge field of oncology and radiotherapy). The latter knew that, if they didn’t want to go home to the coal mines or steel mills, they needed to graduate and to milk the opportunity of University life for status and connection and an entree into society.
As a result, institutions were small, high trust, like-minded places. Students were not consumer children but adults looking to learn. Academics were not administrators but self governing professionals.
The UK explosion in University education (half the population) has merely led to an explosion of credentialism (nursing, policing and army officering are now graduate entry fields!). A first degree is insufficient to differentiate so now the grammar school types all do masters degrees. The expansion has been funded withnsrudent fees. Institutions have maximised these and to.attract students, invested in the hotel aspects of university rather than the academic. The resulting overproduction of graduates has enabled Universities to hire some of them as junior faculty on precarious terms and this balance the books. Administrators have increased in number and standing, as the numbers of consumer students to satisfy and restive faculty to discipline have grown.
How do you put this genie back in the bottle? Shrink student rolls, close glossy business schools, shutter purpose built student housing, empty the swimming pools and lock the gyms and drive the adminstrators out of the ivory tower? But who would still come from the small target population to the newly austere and select degrees and, relatedly, how would we burn the cancer of credentialism of society?
We’ll actually get a preview in the UK where the new anti-immigratiom vibes have led to foreign student visas being hugely reduced but these students pay £40k p.s. for courses which charge UK students only £9k p.a. Foreign stident numbers are markedly down and UK universities are screaming about austerity, closures, the risk of a storied name going under and, of course, the need for a bailout. The entire country says “jog on!” so it will be interesting to see if the vice chancellors et al. tighten their belts or merely sack their colleagues….
This is nonsense. This will not create good scientists. A more rounded education leads to students gaining the ability to think in different ways, ways which will lead to scientific breakthroughs.
A second point is that a proportion of prospective students are probably being put off by the continual emphasis on war which is current policy in the West. Most people want to live in a peaceful world. Why work on semiconductors when the whole emphasis is a race to build new and better weapons, and the leaders of the Western countries are bent on conflict and don’t care about the living standards of their people.
I think it is better that the West doesn’t find a solution to this lack of scientists and engineers for the good of our planet.
I don’t work in the semiconductor industry, but I have over 30 years in the technology sector as a software engineer/computer programmer.
In general, working in the tech sector can be horrific. Wages are above average, but employers routinely demand insanely long hours in return. I once interviewed for a position where I was informed that I would be expected to work a minimum of 60 to 70 hours a week. In a facility with inadequate ventilation where I would be breathing in solvent fumes for every one of those 60+ hours. Having lost two good friends who died from occupational chemical exposure, I couldn’t turn that one down fast enough.
Add in the institutional age discrimination where you may get forced out of your engineering profession in your 40’s and into driving a limo by a corporate buyout of your employer. (Former Digital Equipment Corp (DEC) engineer who once drove me to the airport. Lost his job after Compaq Computer bought DEC).
My children have heard all these stories, and I have strongly encouraged them to look for a career path outside the tech industry. Both of them would make phenomenal engineers, but I very much doubt either will pursue that path.
I remember seeing articles in the 1990’s talking about the divorce rate among Intel employees being 5x the national average. Not a great way to encourage the next generation to come to work for you.
“Yet that seems to be endemic in a world of MBAs whose brains have been addled by PowerPoint.”
Yes, I thought Yves was sounding a lot like Tufte.
The play is to get talent from abroad cheap and further promote privatized profit of public research.
Project 2025 PRESIDENTIAL TRANSITION PROJECT
“National Economic Council. The NEC was established in 1993 by executive” (Bill Clinton) “order” “Those who have served in the role have ranged from former CEOs of the nation’s largest investment firms to financial-services industry managers to seasoned congressional staffers who have managed the economic policy issues for top financial and tax-writing committees.”
“The remaining 14 science and energy labs should focus on basic research projects; demonstration and deployment of technology should be left to the private sector.”
“Unleash private-sector energy innovation by ending government interference in energy decisions.”
“The agency is unnecessary, risks taxpayer dollars, and interferes with risk-benefit decisions that should be made by the private sector.”
it took just 16 short years for bill clintons disastrous mess to implode. turning a first world nation, into a sinking third world quagmire.
and it would have even been shorter, if bush jr. had not dropped helicopter money after 911.
i knew the democrats would try some sort of three stooges industrial policy. the nafta democrats hate the deplorable, and have no real understanding of production, only money and paper manipulation.
FDR was lucky, smoot-hawley saved the factories, FDR saved the farms with tariffs and government policy.
and the new deal worked because of smoot-hawley. and smoot worked because of the new deal.
today, most factories are gone, along with the skills and machinery. i am to old to see if americas wealth machine can be resurrected, but i doubt it.
One thing that prevents students in the US from majoring in something like electronics engineering is the expense of going to college followed by uncertain career prospects. The STEM curriculum is harder than many other tracks. Why risk the effort and expense of studying for what might well be a short career and a sudden layoff?
Foreign students often attend college for free or at a low price, decreasing their risk. Students here have to take on a mortgage worth of student loans to even try to get a job.
Huge agree. I know a few guys who would love to be majoring in engineering, but they’re paying for college themselves and have to work full time. They simply do not have enough time to complete a rigorous major. It makes me really sad, because these are smart, hardworking people interested in engineering stopped by the cost.
I worked at an HP facility that manufactured surface-mount circuit boards. In the early 1990s we were brought into a conference room and shown pictures of an HP facility being built in China. China was going to be part of HP. Some time later one of our automated board test systems was shipped to China along with a person in our group that spoke English, Vietnamese, and Chinese. Along with him some old circuit-board manufacturing equipment was also shipped. That person in our group trained the Chinese employees on the automated board test system and they began manufacturing the older circuit boards. The surface-mount manufacturing done in the US was eventually sold to a company in Oregon in 1997.
If there is a shortage of workers in the tech industry, it is a sign that the wages are too low, the benefits (pensions and health care) are not enough and job security /promotions are none existent.
If your clever enough to work in the tech industry, you are clever to work on wall street, in software, or as a hedge fund manager.
Also parents have warned their children about how they were treated in the 80s and 90s when the industry put them on the scrap heap, as it first went overseas.
I work in the semiconductor industry. In addition to the skill shortage, I wonder if there may be a cultural mismatch as well. Working in a semiconductor fab is relentlessly exacting. You have to be detail oriented and attentive all the time. It is not a job for “can I work from home” types who obsess about quality of life issues.
Seems to me “semiconductor industry” covers a wide range of activities/products. Would like to see a breakdown of just what the jobs are. As far as STEM grads, I saw report from IEEE-USA several years back that claimed 30% of US STEM grads were working outside of STEM. Of course there could be many reasons for that, but the idea of “lack of domestic STEM grads” needs closer review. And it isn’t like academics don’t have incentive to push for more visas to tuition-paying students.
But the US has electrolytes, no?!
This is an extraordinary fall. And in the middle of a large push to reindustrialize chip production. The only reasonable conclusion I can think of is that the majority of students were in fact Chinese to begin with and have pulled back to Chinese universities instead — noting that China is attempting to industrialize chip production in the PRC as well.
I thought Taiwan imported the sand for wafer production from People‘s Republic ?
These attempts to create firewalls around US intellectual property, as if innovation always comes from the West and China just steals it, is a supremacist meme that national security managers repeat often enough that they have blinded themselves to how growth and innovation actually happen. In the long run, sanctions on China will just lead to China freeing itself completely from any dependence on the West, while the West continues to be dependent on industrial production by China. This blindness is just one more arrogant aspect of the decline of Western financialized capitalism.
However, I think there is a deeper problem with this race for faster computing and power-hungry AI. Who is talking about whether these technologies are needed by humans that they should be a high priority? Do average people really need faster computers? The primary reasons these advances are being pushed is because capitalism needs the next growth product or capitalism will collapse, and because the neocons want to create a surveillance-police state where a small number of people can control the rest of us using AI wonder-computers in some version of TAI -Total Information Awareness — which in the next iteration involves digital IDs, digital currency, digital border walls, and digital you-name-it. People need to reject these intrusive, wasteful “innovations” and focus on needed developments to help us survive climate change (which involves degrowth and more leisure time to invent actual democracy) – not faster video games, phones to tell us what to do, and massive surveillance systems that are so intrusive at to virtually destroy privacy rights. The amount of propaganda about AI systems popping up on my computer, with claims it will make our lives better by creating some utopia, is obscene — just the latest version of manufacturing consent. People need to stop playing with their phones and pick up book — preferably some non-fiction about how capitalism has waged destruction on workers, POC, the global south, and the environment. Read Edward Said, Walter Rodney, Eduardo Galeano, Silvia Federici, Diana Johnstone, Naomi Klein, Sheldon Wolin, Chomsky, Richard Barnet, C. Wright Mills, Susan Jacoby, Dunbar-Ortiz, Arundhati Roy. And once you get the picture, get off your butt and change the system away from endless wars and endless consumption.
[ These attempts to create firewalls around US intellectual property, as if innovation always comes from the West and China just steals it, is a supremacist meme that national security managers repeat often enough that they have blinded themselves to how growth and innovation actually happen. In the long run, sanctions on China will just lead to China freeing itself completely from any dependence on the West, while the West continues to be dependent on industrial production by China. This blindness is just one more arrogant aspect of the decline of Western financialized capitalism… ]
An excellent comment, all through.
https://www.nytimes.com/1971/06/20/archives/joseph-needham-the-real-thing.html
June 20, 1971
Joseph Needham, the Real Thing
By Richard Boston
“Science and Civilisation in China.” Twenty-seven books (1954-2008)
Lots of comments above querying the link from (A)protectionism, to (B) shortage in hiring for STEM positions. IMO it seems pretty bleeding obvious. In what used to be an open market for all, 90% of the world’s chips could be produced in Taiwan, the entire world could purchase from them with only supply as limitation. In this scenario, suitably trained talent from the entire world could be available to chip manufacturers. While the varying supply chains were geographically widely dispersed, the globe had a more or less streamlined, and efficient supply chain for semiconductors with minimal redundancies. Enter political protectionism (more about slowing down China’s technological rise then about increasing domestic US production capacity) and now we see supply chains being duplicated across the planet. China now needs it’s own supply chain of as many differing types of chips as they can manage, likewise the USA. India no doubt is looking at creating/growing/diversifying it’s own. We already have Korea and Japan each expanding their own capacities. All this expansion, most of it redundant, comparatively speaking, stems from the fears of the growing tide of (mostly USA induced)protectionism. Hence, the available talent pool is being drawn down and stretched, never mind the myriad of other politically induced layers of additional security red tape being introduced for international hires into these now “critical” supply chains, and it’s not difficult to see how (A) protectionism, leads to (B) shortage, or reduction in STEM hires. Or am I missing something?
yes you are missing something. protectionism worked well for america. just ask old abe.
protectionism is working well for china, just ask Xi.
protectionism is working well for russia, just ask a stunned Putin.
what does not work is the blowback from idiot free traders who are enraged like a dumped lover.
a lot less trade and more localism is far more efficient for the planet.
The US will just have to dial up the saber rattling in Taiwan Straits and Korean Peninsula. That way, the most talented engineers will be convinced to move to the US. Voila, talent crunch fixed.
The CHIPS Act seems similar to Obamacare: Throw Federal bucks at a problem and expect what is a fundamental shift. Instead, we will see that Biden kept his most important 2020 campaign promise:
Nothing will fundamentally change.
Now, in so many ways, we see that STEM stands for Slave To Evil Megacorporation and wonder why there is a lack of willing slaves.
Former semiconductor engineer here (now retired). I loved the technical aspects of the work but on the downside, it was always an unstable business (it’s highly cyclical so layoffs are always just around the corner), and American workers have to compete with H1-B engineers. Furthermore, my employer was bought out by a private equity firm that proceeded to cut engineering staff & cut investment in new equipment, outsource much of the production (to TSMC), load the company with debt, all the while adding more layers of management and paying themselves handsome bonuses and consulting fees. It’s no wonder American manufacturing cannot compete!
To be successful in manufacturing, you need to be in it for the long haul, accept meager returns, and retain your knowledge workers, as Asian companies do. American management is just the opposite of that. Tariffs and subsidies may have a legitimate role but are not enough to overcome our sucky management culture.
Reason US does not make TNT is because it was phased out in favour of IMX101 from BAe for use in shells
I went to school in the 90s and started in engineering, including VLSI design. Though I was interested, it was clear there wasn’t too many jobs and the university knew it so didn’t put too much money in the area. So I moved to software.
This has been decades in the making and it would take a decade to turn things around.