These industrial and geopolitical forces increased their support for federal chip legislation. For chipmakers, it has been clear since the Trump administration that US manufacturing would be encouraged and imports would be threatened by trade restrictions. The final bill attracted both a rare measure of bipartisan support in Congress and a rare endorsement of industrial policy.
Experts say there could be a role for government intervention on behalf of industries that are critical to the country’s economy.
Japan effectively mobilized government support for the automobile, mainframe, and semiconductor industries in the 1960s and 1970s. Today, China is pumping government funding and incentives into high-tech fields such as computer chips, artificial intelligence, and quantum computing.
“It’s clear that industrial policy works, although it has its limitations,” said Michael Cusumano, a professor at MIT’s Sloan School of Management. “And that sounds like a real effort for some kind of level playing field.”
In recent months, the chip market cycle has swung downward. Covid-related lockdowns in China, the war in Ukraine and inflation have taken a toll on consumer spending, as many economies struggle or are heading into recession.
PC shipments, for example, are expected to decline about 13 percent this year, according to research firm IDC. Smartphone sales are also weak.
Micron is a leading producer of memory and data storage chips used in personal computers, smartphones, data centers, automobiles, and a host of other electronic products. The company, based in Boise, Idaho, reported a 20 percent drop in sales last quarter, to $6.64 billion, and a 45 percent drop in profit, to $1.49 billion.
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