How to Make the U.S. Semiconductor Industry Boom Again

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:15)

And I'm Tracy Alloway.

Joe Weisenthal (0:17)

Tracy, we're doing another semiconductors episode today.

Tracy Alloway (0:21)

There's no escape. Once you're in, you can't get out, right?

Joe Weisenthal (0:24)

We're gonna be doing semiconductors episodes for the rest of our career, I'm sure. But I think there's actually two reasons, maybe three or maybe a bunch, why we keep going back to this well. I mean, for one, there's just a lot of news. Like so many things have happened, whether it's sort of new ventures from say Intel or new spending plans from Taiwan Semi or new legislation being proposed. So there's all kinds of new news.

But I also think it's just a really good, it's a good topic for us.

Tracy Alloway (0:57)

Yeah, I think it's an interesting mix of technology and sort of business competition and also government policy. And we've spoken a lot about this, but government policy plays such a big role in sort of incubating semiconductor industry. And I think we spoke about this probably the most with Taiwan and TSMC. But even in the US, you have that history of government support nurturing the early stages of the semiconductor industry as well.

Joe Weisenthal (1:29)

Yeah, that's exactly right. Like it touches on all these things, technology, competition, markets, stock market. But as you say, there is a long history in China, now currently Taiwan, Japan, the US, of governments playing a role. And I think there's like this sort of broader macro thing, which we talk about all the time of sort of more activist role for government, for democratically elected leaders, like thinking, taking a more active role in shaping the economy and managing the economy. And so like, because of that, and because of the history of chips, semiconductors fit right into our wheelhouse.

Tracy Alloway (2:10)

Yeah, it's sort of a nice Petri dish, I guess, for a greater fiscal role for governments.

Joe Weisenthal (2:16)

Yeah, exactly, exactly right. And every time we do semiconductor episodes, people listen to them and they want more, so we are going to deliver.

Tracy Alloway (2:24)

So here we are again.

Joe Weisenthal (2:25)

Yeah, so here we are, here we are again. So, you know, like, I've forgotten all the ones we've done. We've done the fall of Intel, the rise of Taiwan Semi, China's own ambitions, the stumbles of the US.

I don't know if we've like really done one yet on what it would take for the US to really have a sustained recovery in its semiconductor manufacturing prowess. And of course we know that that's important because we have this acute semiconductor shortage, particularly affecting autos, but also there is this sort of long-term, maybe it's a defense, maybe it's a geopolitical concern beyond this acute moment that it is problematic that such an important piece of basically everything that gets built is almost entirely important.

Tracy Alloway (3:11)

I'm pretty sure we've touched on it in various episodes, but you're right, we haven't done a whole episode dedicated to US policy in the same way that we've done it for Taiwan or China.

Joe Weisenthal (3:21)

Yeah, exactly right. So today, I'm very excited because we're going to finally talk about some of the history of semiconductor policy in the United States and also perhaps what policies could revive the domestic industry.

Tracy Alloway (3:38)

All right, let's do it.

Joe Weisenthal (3:39)

All right, so I'm very excited to speak to our guests. It's sort of actually the perfect combo because we actually have two guests today. One of them is an economist and one of them is a technologist.

Alex Williams and Hassan Khan wrote a piece for Employ America back in March, titled, A Brief History of Semiconductors, How the US Cut Costs and Lost the Leading Edge. And Alex is an economist and research analyst at Employ America. Hassan, he's a PhD from Carnegie Mellon on semiconductor policy specifically, and he now works in tech in both operations and procurement. So between the two of them, kind of the perfect way to talk about the macro and the micro at once.

Alex and Hassan, thank you so much for joining us.

Alex Williams (4:24)

Really excited to be here.

Hassan Khan (4:25)

Yeah, glad to be here.

Joe Weisenthal (4:26)

So what is it from your perspective? I mean, as I said, you guys wrote this piece on Employ America, which normally is sort of very focused on bigger picture macro stuff, labor market stuff in general.

Why from your perspectives is semiconductors as sort of a thing that fits into that rubric?