Biden's CHIPS Act and Taiwan Semi: What If They Gave Away $53 Billion, but Nobody Wanted It?

AP Photo/Evan Vucci

Chipmaking giant Taiwan Semiconductor (TSMC) has serious concerns about taking CHIPS Act money — part of Presidentish Joe Biden’s budget-busting effort at a shotgun marriage between Big Government and Big Tech — to build a long-planned fabrication plant in Arizona.

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The Wall Street Journal says that “Chip makers and the Biden administration are in uncharted territory,” with up to $53 billion in taxpayer subsidies for chip fabs, “as the U.S. begins an experiment in industrial policy.”

But TSMC Chairman Mark Liu said to industry leaders at a conference in Taiwan last month, “Some of the conditions [in the CHIPS Act] are unacceptable and we aim to mitigate any negative impact from these and will continue discussions with the U.S. government.”

In February, the New York Times reported that “internal doubts are mounting at the Taiwanese chip maker over its U.S. factory” due to “high costs and managerial challenges showing how difficult it is to transplant one of the most complicated manufacturing processes known to man halfway across the world.”

All that doubt about the wisdom of TSMC’s investment, even with U.S. taxpayers providing as much as $15 billion for the Arizona facility.

The sticking points involve caps on TSMC’s profits and Washington’s “demands for extensive access to TSMC’s books and operations,” according to the Journal. Recipients of CHIPS funds of more than $150 million must pay back to the U.S. Treasury profits that “exceed expectations.” And I don’t know about you, but if I were a multibillion-dollar firm whose position depended upon remaining on the bleeding edge of the highest-tech manufacturing in history, I wouldn’t want to share my secrets with leak-happy Washington.

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I’d also add that today’s requirements are merely today’s requirements. Just like in 1984, what the Party requires today might not be what the Party requires tomorrow.

There’s an ancient bit of wisdom that, like everything else it touches, progressive government has turned on its head. “Pay the Danegeld,” Britons of old used to caution, “and you’ll never be rid of the Dane.”

When Viking* raiders came to English shores, they were often given a choice: Pay them their due — the Danegeld — or you puny villagers had better be ready to do battle with seasoned warriors. Fail to pay, and you got your men killed, your women raped, and your village burned. Pay up, and you’d better believe they’d be back next season for another taste of that sweet Danegeld.

ASIDE: Yes, to certain smarty-pants out there, in Old Norse, “viking” was a verb, the act of going out on longboats and causing trouble. I am neither Norse nor (that) old, and neither are you. In English, “Vikings” are the guys on the longboats causing the trouble. Don’t write letters.

Our behemoth in Washington doesn’t work like those crude Vikings. Its path to increased power is sneakier, subtler. Washington dangles money in front of everyone, and I do mean everyone. Local schools, state departments of transportation, major foreign tech companies, colleges, and contractors large and small.

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“Go on, take the money. It’s free!”

But once you take the Fed-geld, you’ll never be rid of the Feds. The money is never free. It always comes with terms, conditions, mandates, paperwork, 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 men be allowed to use the women’s restrooms.

So all I can say to the good folks in charge of Taiwan Semi: Good job looking this gift horse in the mouth. But as much as we need your technology built on our shores, my advice to you would be to take a pass.

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