Nvidia spokesperson rare criticism of Biden's chip bill, supported by US think tank research

Nvidia spokesperson issued a rare press release criticizing the Biden administration's AI proliferation framework policy. The Biden version of the 'Chips and Science Act' was announced in 2022 in response to the semiconductor chip shortage caused by the COVID-19 pandemic. The Biden administration believes that passing the chip act will revitalize the U.S. semiconductor industry and also considers 'Made in America' as a 'national-level' issue, which can reduce America's reliance on foreign chip manufacturing. Nvidia has raised several questions about Biden's policy, prompting private research institutions in the United States to join the discussion and publish opinions and investigation results.

A study by the Boston Consulting Group and the Semiconductor Industry Association found that if the production quantity is used instead of the US dollar value to measure, the US's share of global wafer semiconductor production has dropped from 37% in 1990 to 10% in 2022. The Biden administration believes that not exporting chips to China or elsewhere can increase the global market share of US semiconductors. However, a research report released by an economic think tank in Washington pointed out that this approach is costly and ineffective.

The American Economic Think Tank believes that the chip subsidy program will affect the national treasury.

Researchers at the Peterson Institute for International Economics found that Biden's 'Chips and Science Act' could create a constructive 93,000 job openings, which will generate 43,000 permanent opportunities when operational, but at a high cost.

A research report found that behind the prosperity of the chip manufacturing industry, the subsidies paid by the US government are even more expensive. Each job created will cost taxpayers nearly $185,000, which is twice the average annual salary of US semiconductor employees. Researchers Gary Hufbauer and Megan Hogan said that increasing production may not provide the best guarantee for the amount paid.

The report points out that Congress did not consider alternative measures to protect the U.S. semiconductor industry when passing the 'AI Artificial Intelligence Chip Act'. For example, it could consider establishing a chip inventory managed by the Federal Emergency Management Agency, providing financial incentives for chip users and foreign chip manufacturers, and reserving more inventory for the United States, etc.

The U.S. Department of Commerce issued a statement regarding the study, promising to remain vigilant in the use of taxpayer money and the allocation of chip funding. The Department of Commerce vows to rigorously review companies' investment plans to ensure they are not exaggerated and do not request excessive incentives.

Geopolitics and the situation in the Taiwan Strait affect the chip supply chain

US policymakers believe that the US should not overly rely on chips produced in Taiwan. If China launches a military attack and the situation in the Taiwan Strait becomes unstable, Taiwan's chip supply will be short. TSMC is currently expanding its factory in Arizona and moving its production lines to the US.

Trump wants protection money to maintain world peace

Both Taiwan and South Korea currently provide generous tax deductions to local chip manufacturers to maintain their leadership position in the market. The upcoming Trump 2.0 has not yet made a specific statement on Biden's chip policy, but Trump previously stated that 'tariffs' can be used to sanction other countries. Taiwan can generate revenue for the treasury by paying 'protection fees', without having to rely on subsidies to encourage foreign companies to produce in the United States.

When Trump was 1.0, many Taiwanese companies said that they would invest in Texas, but the thunder and rain were small. Trump, who has suffered a suffocating loss, returned to the basket when the president of the United States realized that if he wants to be the boss, he must first say that he will charge "protection fees", and how much protection money should be given is sincere? TSMC invested $6 billion to set up a factory in Arizona, and if Trump uses $6 billion as an indicator, other companies can also use it as a reference.

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