On May 15, the administration announced that Taiwan Semiconductor Manufacturing Co., plans to build a new $12 billion factory in Arizona.  In addition,  Intel is considering moving some production back to the U.S., and U.S. officials is also trying to convince Samsung to the States.   Call us skeptical as announcements are just that and we will believe it when the chips begin to roll off the production lines.

One big issue is the lack of skilled labor in the United States.  Tim Cook addressed this when he explained why Apple manufactures in China,

The number one reason why we like to be in China is the people. China has extraordinary skills. And the part that’s the most unknown is there’s almost 2 million application developers in China that write apps for the iOS App Store. These are some of the most innovative mobile apps in the world, and the entrepreneurs that run them are some of the most inspiring and entrepreneurial in the world. Those are sold not only here but exported around the world. — 

Good piece in the Wall Street Journal discussing the difficulty of moving semiconductor fabs back to the United States,

American chip companies depend on foreign graduates and workers. Advanced semiconductor research, development and manufacturing are incredibly complex, and workers in the industry require years of education and training. Our research shows that more than 40% of high-skill semiconductor workers in the U.S. today were born abroad. The same is true for two-thirds of graduate students in semiconductor-related programs at U.S. universities. Intel, the leading U.S. chip manufacturer, estimates that “without OPT we would be able to hire just 30% of the highly skilled graduates we currently hire.”  — WSJ

Moreover, the administration’s policy to attempts to impose new large-scale immigration restrictions is a problem,

American chip companies depend on foreign graduates and workers. Advanced semiconductor research, development and manufacturing are incredibly complex, and workers in the industry require years of education and training. Our research shows that more than 40% of high-skill semiconductor workers in the U.S. today were born abroad. The same is true for two-thirds of graduate students in semiconductor-related programs at U.S. universities. Intel, the leading U.S. chip manufacturer, estimates that “without OPT we would be able to hire just 30% of the highly skilled graduates we currently hire.”

New chip factories would require more workers. Demand in the sector is already significant: While national unemployment rates are tragically high due to Covid-19, evidence suggests that unemployment in high-tech industries has remained low. Barring foreign hires would make it difficult for semiconductor companies to fill their current needs, let alone expand. Immigration restrictions would likely prolong America’s dependence on supplies of foreign chips. – WSJ 

The big winner from immigration restrictions wouldn’t be U.S. workers but the Chinese government.