The Biden Administration is promoting a $50 billion plan to improve American infrastructure. But, what will this mean for the American Semiconductor Industry? And, is bipartisan support on Capitol Hill necessary to implement this plan? Let’s find out! Also, we’ll consider how this plan will affect American Semiconductor Manufacturers. Let’s explore these issues in this article.
Biden’s $50 billion infrastructure proposal
President-elect Joe Biden’s $50 billion infrastructure proposal is a welcome change from President-elect Donald Trump’s recent tax plan, but there are a few major sticking points that will make it hard to pass. First, Republicans have been sour on Biden’s 15% corporate minimum tax plan, which would make sure all companies pay their fair share of taxes. Second, Republicans want to use untapped COVID-19 relief funds to pay for infrastructure improvements. And, of course, Democrats are ready to take advantage of the budget rules to pass the bill, which means that the Republicans have to take a hit.
The plan also calls for the replacement of 50,000 diesel transit vehicles with electric models, and an investment of $111 billion for clean drinking water. The plan also calls for the modernization of our airports, tackling the $115 billion backlog of projects. And, finally, it calls for investments in infrastructure and public safety programs. The plan would help improve the safety of Americans on the roads and in airports, with a special focus on reducing fatalities and injuries from road accidents.
The plan includes $40 billion for public housing, $18 billion for Veterans Affairs hospitals, $12 billion for community colleges, and $16 million for reclaiming abandoned mines and oil and gas wells. In addition, the proposal calls for $400 billion in funding for home care, including the expansion of Medicaid and eliminating the backlog. It also promises to increase the pay of care workers, who are overwhelmingly women of color and earn an average of $12 an hour.
The bipartisan Infrastructure Investment and Jobs Act was approved by the House and the Senate in August. President Biden said the bipartisan infrastructure plan makes America move again. He announced the formation of a task force for the funding of infrastructure, including Brian Deese, director of the National Economic Council, and former New Orleans Mayor Mitch Landrieu. These two people will oversee the funds. That’s a step in the right direction.
As president, Joe Biden will also electrify the nation’s rail system. In a move that will reduce diesel fuel emissions, he will also work with Amtrak and private freight rail companies to electrify the system. He will also put forward additional housing policies. So, you can be sure that these investments will benefit every American. So, don’t miss this opportunity to vote for Joe Biden.
Biden’s plan will increase funding for competitive grant programs. The Better Utilizing Investments to Leverage Development program will receive a significant boost under the new plan. Biden also pledges to prioritize investments that will improve U.S. manufacturers’ supply chains, reduce shipping costs, and boost U.S. exports. But there are also a few other pitfalls to consider. The $50 billion infrastructure plan should be carefully considered by voters to get the most out of the plan.
Impact on the American Semiconductor industry
The current state of the American Semiconductor industry illustrates the challenges associated with reshoring the manufacturing of chips and other components. Although the industry has attempted to increase production, recent government data has shown a significant gap between supply and demand. Legislative efforts to restructure supply chains may be intended to build longer-term resilience, but the current situation underscores the logistics of semiconductor production. In the short term, reshoring would only create cost increases for consumers, but it will be impossible to ensure chip supply in the long term.
The semiconductor industry had become a commodity, with low-end semiconductors being interchangeable. The industry’s growth prospects were limited by the weak economy, and many companies were forced to alter their long-standing procurement strategies to remain profitable. In the medium-term, lagging-edge semiconductors could reach $600 billion, according to McKinsey’s analysis. However, to achieve that milestone, the industry would need to achieve two percent annual price increases, a rebalanced supply-demand situation, and booming demand for electric vehicles.
In the long term, the impact of a trade war on semiconductor production may be a good thing. The trade war has increased the cost of some goods and restricted access to certain products for blacklisted Chinese companies. This year, the U.S. added Semiconductor Manufacturing International Corp. to its trade blacklist. This disruption has disproportionately affected Japan and Taiwan. A lack of chips has caused delays in the launch of Intellivision Amico consoles.
The US semiconductor industry has long been a leader in the semiconductor industry. Since the 1950s, the US has invested heavily in technological advancement and chip manufacturing. In the 1990s, US semiconductor producers controlled nearly 40 percent of the global chip assembly market. Today, US semiconductor producers have established SEMATECH, a cooperative of US chip companies that receives $100 million in government funding. This legislation is unlikely to pass the House of Representatives until at least 2020.
Despite these challenges, the US government has also helped to foment an environment of competitive and diverse semiconductor firms through science and industrial policy. It also encouraged public-private partnerships with individual firms, and closer integration of academic and industry R&D. Meanwhile, the government’s fiscal spending has helped to provide the necessary liquidity for the industry to get off the ground. But this isn’t enough. Clearly, the US has to update its industrial policy to remain competitive in the global market.
SEMATECH has had a profound impact on the American Semiconductor industry. By encouraging firms to pool resources and build US-based semiconductor manufacturing facilities, the industry is growing fast. As a result, both companies within and outside the consortium increased their R&D intensity. The effects of the program on R&D spending have been mixed, but in general, the policy encouraged more research and development within the industry.
