Those industry and geopolitical forces increased support for the federal chip legislation. To chip makers, it has been clear since the Trump administration that manufacturing in the United States would be encouraged and imports would be threatened with trade curbs. The final bill attracted both a rare measure of bipartisan backing in Congress and a rare endorsement of industrial policy.
There can be a role, experts say, for government intervention on behalf of industries deemed to be crucial to a nation’s economy.
Japan effectively marshaled government support for its auto, mainframe computer and semiconductors industries in the 1960s and 1970s. Today, China is pouring state funding and incentives into high-tech fields like computer chips, artificial intelligence and quantum computing.
“It is clear that industrial policy works, though it has its limits,” said Michael Cusumano, a professor at the Massachusetts Institute of Technology’s Sloan School of Management. “And this looks like a real effort to kind of level the playing field.”
In recent months, the chip market cycle has swung down. Covid-related lockdowns in China, the war in Ukraine and inflation have affected consumer spending, as many economies struggle or head for recession.
Personal computer shipments, for example, are expected to decline nearly 13 percent this year, according to IDC, a research firm. Smartphone sales are also soft.
Micron is a leading producer of memory and data storage chips used in personal computers, smartphones, data centers, cars and an array of other electronic products. The company, based in Boise, Idaho, reported a 20 percent falloff in sales in its most recent quarter, to $6.64 billion, and a 45 percent decline in profit, to $1.49 billion.