SAN JOSE, Calif. -- The Harvard Business Review
recently launched a lively, relevant debate about whether or not the U.S. high-tech sector still needs domestic manufacturing to remain competitive.
I say yes! But sadly, in the U.S., we've seen chip makers shut down their fabs one-by-one over the years. Very few fabs are now built in the U.S. Intel, Samsung, GlobalFoundries are among the few.
This trend has been going on for years. But to me, it's still alarming. The U.S. needs to reverse that trend--or we stand to become a fabless society and lose the fine art of chip production.
How can we reverse that trend? I have thought about this for a long time. One possible solution: Why not tell the Asian silicon foundries (TSMC, UMC, SMIC, etc.) that they must build fabs in the U.S.? Make it a U.S. government mandate.
Foundries provide great manufacturing, but frankly, they have taken U.S. fab jobs. IDMs have used the foundry model to rationalize and shut down their own fabs. In some cases, that makes sense. IDMs say it cuts costs.
I say it's an excuse. What's done is done. Now that foundries have benefited from outsourcing, they must put some money back into the U.S.--and even Europe--by building fabs in those regions.
TSMC has one fab in the U.S., but is that enough? X-Fab has one. IBM has a U.S. fab. GlobalFoundries will put a fab up in 2012. That's not enough to save U.S. manufacturing.
Make it attractive to set up foundries in the U.S. Try tax incentives, holidays, etc. Silly idea? Not really. Besides Intel, Samsung and a few others, who will build fabs in the U.S.? Try the foundries. The rest is nothing but talk.
Any thoughts or feedback on this?