If you had the opportunity to take a few billion dollars in free money from Presidentish Joe Biden but the catch is that your company would have to embrace the administration's DEI policies, what would you do? If you're a chipmaking giant like Intel, Samsung, or Taiwan Semi, then the answer is increasingly obvious.
"Free money? No thanks!"
The free money in question is the $50 billion or so in official bribes for companies to build state-of-the-art chip fabrication plants in this country — like companies used to do when this was still a decent place to do business.
So what started last April with Taiwan Semi expressing doubts about Washington’s “demands for extensive access to TSMC’s books and operations" has snowballed. In a recent piece with a spot-on headline — "DEI killed the CHIPS Act" — Matt Cole and Chris Nicholson write that chipmakers aren't so thrilled with the strings that come with CHIPS.
The Biden administration recently promised it will finally loosen the purse strings on $39 billion of CHIPS Act grants to encourage semiconductor fabrication in the U.S. But less than a week later, Intel announced that it’s putting the brakes on its Columbus factory. The Taiwan Semiconductor Manufacturing Company (TSMC) has pushed back production at its second Arizona foundry. The remaining major chipmaker, Samsung, just delayed its first Texas fab.
"So what explains chipmakers’ apparent ingratitude?" Cole and Nicholson asked. "In large part, frustration with DEI requirements embedded in the CHIPS Act."
If I had an "I Told You So" dance, this is where I'd pull on my dancing shoes and get to it.
Because I did tell you so — eleven months ago when word first came that Taiwan Semi was getting cold feet.
You probably know the old warning against paying the Danegeld, as I reminded you back then, or you'll never be rid of the Dane. Vikings would show up at some village in Britain, and the locals could either pay them off or get looted and raped.
Our behemoth in Washington doesn’t work like those crude Vikings. Its path to imposing its will is sneakier, subtler. Washington dangles money in front of everyone, and I do mean everyone. Local schools, state departments of transportation, major tech companies, colleges, and contractors large and small.
“Go on, take the money. It’s free!”
But once you take the Fed-geld, you’ll never be rid of the Feds. The free money comes with terms, conditions, mandates, paperwork, and busybody oversight… all of which do nothing but increase over time. What started as a seemingly noble effort in the 1950s to advance American science by funding university research labs has metastasized into orders from on high that middle school boys be allowed to use the girls' restrooms.
Now here we are, 11 months after the first rumblings from chipmakers that CHIPS wasn't worth the DEI headaches — and everything is proceeding exactly as I have foreseen.
Advantage: VodkaPundit.
Or as a very sharp commenter put it to me last April, "Any smart country would ask itself why don't manufacturers want to build here and then go tackle those problems. But no, we are a dumb country that thinks we can offer a bribe to offset the regulatory madness, endless gov interference, lawsuits, and unproductive labor that is our way of doing things."
But "deregulation" is not a word you'll find in the Biden Stylebook, so here we are with billions in free money and zero takers.
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