Abundance

by Ezra Klein

A report by the Semiconductor Industry Association says that the US share of global semiconductor-manufacturing capacity dropped from 37 percent in 1990 to 12 percent in 2020.28 Part of the reason is cost. The association estimates that building and operating a semiconductor-manufacturing facility in the United States costs about 30 percent more over ten years than it does in Taiwan, South Korea, or Singapore.29 In 2023, the Biden administration released its Notice of Funding Opportunity for the $39 billion it intended to hand out to semiconductor manufacturers to locate new fabs in the United States. Reading the NOFO was a strange experience. Here was the US government trying to recapture an industry it had lost in part because it had become cost-prohibitive to manufacture semiconductors domestically. But the NOFO did not seem laser-focused on the cost problem. To be honest, it did not seem laser-focused on any problem.