'Chip War' Chris Miller Praises US Semiconductor Support Act: "Surprisingly Successful"

Through Foreign Media Contributions: "More Than Half of US Aid Spent"
"Even Without Self-Sufficiency, Shock Management Potential Increases"
"Thanks to This, Investment in Older Semiconductors Also Possible"

The Biden administration in the United States has confirmed subsidies for semiconductor companies such as Intel, Samsung, and TSMC this year, and "semiconductor expert" Chris Miller, a professor at Tufts University, evaluated the U.S. CHIPS Act as "surprisingly successful so far."

Author of the book 'Chip War,' Chris Miller, Professor at Tufts University, USA (Photo by Chris Miller)

Professor Miller made this assessment in an op-ed for a major foreign media outlet on the 25th (local time). Miller is the author of the book "Chip War," which covers semiconductor competition among major countries worldwide. The reason he considers the Biden administration's support measures successful is that, although the U.S. has not completely dominated the global semiconductor supply chain, it has created room to manage sudden supply and demand issues if they arise.

First, Professor Miller noted that the U.S. government has already used more than half of the $39 billion (about 53.6 trillion KRW) in incentives allocated under the CHIPS Act by recently providing billions of dollars in subsidies to major companies. According to announcements from the White House, the U.S. government plans to invest $27.6 billion in four companies: Intel with $8.5 billion, TSMC with $6.6 billion, Samsung Electronics with $6.4 billion, and Micron with $6.1 billion.

The Semiconductor Industry Association (SIA) estimates that due to these large-scale government support measures, global semiconductor companies and related firms have plans to invest a total of $327 billion in the U.S. over the next decade. There are also statistics showing that the construction of computing and electronic device manufacturing facilities in the U.S. has increased 15-fold.

Professor Miller pointed out that U.S. Secretary of Commerce Gina Raimondo's goal for the U.S. to account for 20% of the world's most advanced semiconductor production by 2030 is not a situation of complete self-sufficiency, considering that the U.S. consumes more than a quarter of the world's semiconductors. However, he added, "Such production will be roughly sufficient for core infrastructure demands such as data centers and telecommunications," and analyzed that "while semiconductors cannot be perfectly substituted and not all factories can easily produce all types of semiconductors, the U.S. will have much greater capacity to manage shocks (supply and demand crises)."

Professor Miller also explained that thanks to the CHIPS Act created by the Biden administration, investment has been possible not only in cutting-edge semiconductors but also in older domestic semiconductors. In fact, considering government subsidies, U.S. semiconductor company GlobalFoundries increased production and signed new supply contracts with Ford and General Motors (GM). U.S. semiconductor companies Microchip and Texas Instruments also decided on additional and new investments thanks to government support.

He emphasized, "As seen during the semiconductor shortage experienced during the pandemic, cutting-edge semiconductors are not the only economically important ones," adding, "Basic semiconductors used in automobiles, missiles, and medical devices are also necessary." He explained that "investments that would not have occurred without the CHIPS Act have taken place."

Professor Miller refuted criticisms that the U.S. CHIPS Act has not been effective. He pointed out, "Critics of the CHIPS Act worry that all these incentives will trigger a subsidy race, but such competition had already started long before." Regarding concerns about so-called 'free riders' who receive subsidies but do not properly build factories, he responded that factory construction has already begun in various locations. Addressing worries that a significant increase in new semiconductor factories could lead to wasted taxes if they fail to find customers, he countered, "On the contrary, technology industry figures like Sam Altman of OpenAI are more concerned about a shortage of AI semiconductors than oversupply."

Professor Miller concluded, "Stock investors will debate whether these new investments by companies will yield profits, and policymakers who view the CHIPS Act as an insurance policy against geopolitical shocks will already see dividends being paid."