The Trump White House is reportedly in talks with several processor manufacturers to build more factories on US soil.
A report by the Wall Street Journal, quoting a source close to the matter, noted that the Trump administration is in advanced negotiations with Intel to begin building a chip manufacturing plant amidst growing fears that the United States is significantly reliant on overseas manufacturers for these important processors.
The Trump administration has said many times that it intends to bring more manufacturing back in the US but has not followed that through with any concrete action yet. Although the White House has boasted many times that the US tech industry is slowly warming up to the idea of producing in the US, this is not entirely true. In fact, very little progress has been made on that end. Trump has even lied before that Apple is building a new factory in Texas, something the smartphone maker has disputed too.
In light of this, it would be risky to believe that these ongoing negotiations will yield any serious results. While it’s not unlikely that chip makers will step up some of their operations in the US, it may not be on the scale the president wants or hopes.
Nonetheless, Intel, through a statement issued to the Wall Street Journal, noted that it’s seriously considering building a chip factory in the US. The same sentiments have also been expressed by TSMC, a company that makes A-series chips for Apple.
However, there are no details about how these factories will be built or the kind of concessions the government will have to offer in order to incentivize Intel and other chip makers to play ball. The Trump administration has often been accused of talking more and doing less and until there’s a concrete plan on the table, it’s still difficult to say with certainty what will happen.
It seems like the COVID-19 pandemic has got the United States to rethink its globalization strategy. For so many years, most of the goods consumed in the US have been manufactured elsewhere, where labor is cheaper, and shipped to the country. Major US manufacturers in various sectors have established plants overseas but it’s becoming clear that in times of emergencies, where every country is on its own, the United States can be significantly exposed.
It’s believed that this dependency is the main driving factor of the ongoing talks between the White House and chip makers. But it’s easier said than done. The global supply chain that distributes these chips into the US has taken years to build. Reversing that in just a few months or years is simply not possible.
The US will also need to invest heavily in new plants and infrastructure in order to have the capacity to make these chips in the states. There are also issues of high labor costs that may end up making the products expensive for the end users. All these issues must be ironed out before any decisions are made.