Paul van Gerven
29 April 2021

Westerns governments are no longer comfortable leaving leading-edge chip manufacturing to Asian companies. But is subsidizing fabs the solution? It’s a precarious dilemma.

“This is infrastructure,” US president Biden, holding up a silicon wafer, told a group of CEOs. Offering 50 billion dollars in support, he urged the corporate leaders to invest in domestic semiconductor manufacturing. European Commissioner Thierry Breton is having meetings with TSMC Europe president Maria Marced and Intel CEO Pat Gelsinger to discuss the possibility of these companies building a fab in Europe. Japan, too, tried to woo TSMC into building a chip factory on Japanese soil. Even India is handing out cash to anyone setting up a semiconductor manufacturing facility.

Governments around the world have had a change of heart. Going against a two-decade-long trend of going along with companies outsourcing IC production to Asia, they want their ‘own’ fabs now, and they’re willing to pay a pretty penny to get them. A necessary move to secure access to a strategic technology in an increasingly unstable world? Or a fool’s errand? Breaking down the bullet points for both sides of the argument.

TSMC fab 18
One of those, please. Credit: TSMC

Yes, subsidizing those fabs is a good idea

No, governments should stay away from fabs