Opinion: The U.S. must put the vital semiconductor industry above Wall Street’s interests

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OPINION: U.S. chip makers must adopt a long-view perspective to protect American jobs and national security, Michael Stumo writes.

America’s manufacturing sector has been struggling of late, and has lost more than 500,000 jobs since the start of the COVID-19 pandemic. Compounding these woes is a recent, global shortage of semiconductor chips. A heavy reliance on computer chips from Taiwan and Korea has hit U.S. manufacturers hard. The nation’s auto sector has been particularly affected, with Ford F, +4.35% forced to cut back production of its F-150 truck and GM GM, +5.61% halting operations at three plants.

Shareholders first, investment second Consider Intel INTC, +3.08%, for example. The California-based chip maker operates 15 foundries world-wide, including four in the United States. Last year, Intel invested $14.5 billion on capital spending. However, it also returned $19.8 billion to shareholders, including $14.2 billion in buybacks of its own stock. Essentially, Intel chose to return more money to shareholders than to invest in operations.

It’s troubling enough that a global chip shortage could grind U.S. manufacturing to a halt. But China is now entering the semiconductor market as well—and is pouring an estimated $120 billion into its chip industry. Given such massive subsidies for its state-owned enterprises, there’s a huge risk that China will swiftly corner the global chip market by the end of this decade.

Washington should set a goal of U.S. manufacturers supplying 50% of the chips consumed in every major category of semiconductors. That would strengthen national security, diversify supply chains, and create hundreds of thousands of good-paying jobs nationwide.

 

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Teaching that might cause head traumas possibly bleed outs in our boardrooms first and shareholders second America.

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