Time to Conduct Some Semiconductor Business At Home

If anybody's waiting on an order for a new Atari VCS microconsole, you might have to wait awhile. There seems to be a massive shortage of semiconductors required for... practically every electronic device we have. Per David Atkins at Washington Monthly:

But there’s increasingly an argument to be made that a just-in-time lowest-cost supply system may not just be bad for the climate or for domestic employment. It may also in many cases be bad for business. The semiconductor crisis tells an exemplary tale. As information technology becomes essential to daily life in developed countries, semiconductors are essential for making the world go round. Phones, computers, gaming consoles and automobiles all require increasingly sophisticated semiconductors. And most of them are made by a single company: Taiwan Semiconductor. Indeed, Taiwan Semiconductor is so dominant in the field that few competitors can match them, and they’re falling farther behind...

We've got a hundred different manufacturers putting together a 1001 different electronic devices, and NOBODY seemed to notice they ALL relied on ONE supplier for a required component to their devices???

The semiconductor shortage is harming vehicle production lines. It’s why the next generation gaming consoles that were supposed to be available last Christmas are still in vanishingly short supply. It is starting to impact smartphones and personal computers as well.

There are many correlated aspects to this problem. It’s partly a matter of national security: what does the global economy do when it relies so heavily on a single actor in a location of geopolitical instability? It’s partly a problem of monopoly: is the market truly free or stable if so many essential products depend on the fate of a single company? How can there be genuine competition if the cost of entry makes establishing new competition prohibitive? It’s partly a matter of the pandemic: Taiwan Semiconductor and other manufacturers have been struggling to meet production targets due to reduced capacity from COVID restrictions.

An over-reliance on global trade and shipping, combined by corporate eagerness to find the cheapest labor instead of reliability and location, have led us to this bloody mess. The Pandemic merely highlighted our vulnerabilities.

At no time in the past 20 years it seems - as the Internet revolution exploded the computer tech industry into the behemoth it is today - anyone planned far enough ahead to plan for possible shortages or cuts to supply lines. It never occurred to anybody relying on tech parts like semiconductors that it would help to establish their own manufacturing to compete for that key part in more than one country/continent so that they didn't rely on Taiwan Semiconductor Inc itself. That company could have branched itself out, using its expertise in its manufacturing techniques to build more factories in other places to maintain a stranglehold on its monopoly of semiconductors while improving its supply chain to ensure availability. Apparently nobody - even the company aware of its own situation - wanted to spend the money to do that.

I'm not a businessman, don't have a degree in economics, but even *I* know it's foolish to rely on one provider of one product from one location that just happens to be so needed for almost everything out there.

But monopolizing practices don't seem to breed expansion or competition, only complacency. Nobody wants to spend profits on improving service or supply. Until it's too late.

If the United States wants to respond properly to this crisis, our own government ought to push for business start-up funds to get semiconductor manufacturers up and running here (and to hell with the local CEO mindset against hiring workers in the U.S. because they might ask for living wages). We've got manufacturing towns dying out because they've been abandoned: This could be a good time to reinvest in those places that can handle the semiconductor industry.

Sort of what Atkins says at the end of his article:

The world has a mutually invested interest in distributing production of goods like semiconductors–and it’s not clear that the private sector should be wholly responsible for taking on the burden. (To say nothing of the leftist critique that the benefits of successfully adding semiconductor production should not redound merely to the shareholders.)

The governments of the world have both a competitive and cooperative interest in ensuring that resources like semiconductors are not at the mercy of geopolitical conflict, and that production can be ramped up as needed even if problems should arise in one company, country or corner of the globe.

What say ye, President Biden? Care to invest America in much-needed semiconductors to generate much-needed jobs?