I think "making them" is a bad idea and a bad precedent plus probably not allowed under a bunch of agreements. I do think tax incentives or tax code changes for manufacturing are a good idea.
Look at the tax rate for someone like TSMC in Taiwan versus the what they would pay in the US and you know why they are in Taiwan although there are also labor rate differences also contributing.
Production knowledge hasnâ??t vanished with the fabs. As EE Times articles have made clear, the leading fabless companies work in the fab with foundries during process development.
Fablessness is also richer in engineering jobs than fabs. According to a calculation detailed in our new book, â??Chips and Changeâ??, fabless companies in North America in 2005 employed about six times as many engineers as all the foundries in Asia.
I concur with both Scott and G-Linden. However, I must stress that we should focus on not just jobs for engineers, but, jobs for skilled labor. Fabs require a significant amount of skilled labor to maintain the machines, build plants, build fab equipment, etc. The next tier of operators is also an important area of jobs. It has been my experience that the people in the skilled labor sector and the operators typically nudged their children into the field of electronic engineering. It is interesting that the number of engineering students from american high schools has declined as the number of fabs has declined.
Just a thought for our dear profession of engineering.
Mark makes a good point but Michael hits the nail on the head in his comment. It's not all about engineers. When fabs and factories leave the US the skilled labor supporting them, the companies providing services to them, the communities depending on revenue from them, etc. etc. all go away. Shipbuilding is a good example. Or steel. Tax policy is the way you influence this problem of course. Create favorable business conditions and the factories and fabs will locate there. (NY may have it right.) But the U.S. as a whole has this irrational fear of using tax policy to create jobs. "We can't be in the business of picking winners and losers" is the oft heard refrain. Bull.
US workers deserve a government that actively supports reasonable, well paying and plentiful jobs or we risk becoming a nation of the un- and underemployed. (Maybe we already are?) I don't know about you but I know many talented, skilled and educated folks - many formerly associated with the high technology sector - who are pounding the pavement and/or "consulting now. A sustained and enlightened industrial policy can fix this. If you need proof that industrial policy works witness what Japan, Korea, Taiwan and China have done for their economies in the last 40 years. Compare this remarkable progress to the "gains" of Americas working middle class over the same period. It's time to bring some jobs home however we choose to do it.
If a company made a decision today to build a fab in the US, it likely couldn't get built and be qualified for production soon enough to be online when the industry transitions to 22 nm. So we're talking about a 16 nm fab which isn't a whole lot of runway before we reach the 11 nm quantum tunneling barrier (oxide thicknesses also reach a monolayer thickness) in ~2015-2016. In addition, interconnects at the 11nm node will have pitches ~50nm and the diameter of a single copper atom is ~0.25nm... so interconnect resisitivity and electromigration are going to get extremely difficult to solve at and beyond the 11nm node. See http://en.wikipedia.org/wiki/11_nanometer for other info.
I believe the more important question is in what direction will fabs go beyond the 11nm node to keep marching to the beat of Moore's Law? Will the industry uniformly transition to spin-based devices, single-electron devices or molecular devices? If the industry goes in the direction of molecular devices, integrated circuits... and the fabs that make them will be completely different animals. Since I'm unaware of there being a great deal of concensus on where the industry is going to after the 11 nm node, it sounds like a risky venture to go put tax incentives in place to build fabs that may not be compatible with the direction the industry goes after 11 nm.
Regardless, it seems as though there is a great deal of uncertainty late in the decade we're about to enter that I would like to see congeal with industry consensus behind it before I would advocate any specific policy regarding future fabs in the US.
Tax rates & labor costs are probably the biggest reason and they are big ones, but the EPA hurdles are also a factor. Manufacturing does include chemicals. Mark, I like your idea and we have leverage points you didn't mention if you progress the idea a little further. The issue skilled labor and engineering jobs are equally key. We need more than burger flippers in this country.
The US badly needs to balance its trade deficit as it is the root cause of all its problems today. A trade deficit of $840 billion is equivalent to as many jobs off shored and if we multiply the deficit by cost of manufacturing the same goods in the US, it will come close to 50% of the $14.4 trillion UD GDP.
Warren Buffet has suggested that we use import certificates to put limits on the imports to balance this deficit. An import certificate which limits the imports from a country as a function of exports to that country will eliminate this trade deficit in one go without alienating the trade partners.
Shifting manufacturing to the US will become imperative in the presence of import certificates. So it might become essential for these foundries to set up manufacturing facilities in the US for the US market or else they simply wont be able to sell in the US.
The only catch with import certificates is that they cannot be applied to commodities like crude which cannot be manufactured locally.
To be fair those EPA hurdles are there to keep our air and water reasonably clean, and unless we want to have a wage war with China (which is insane) labor costs aren't going to be going down. IIRC, didn't our corporate taxes go down a bit during the Bush years? Part of the problem with that is we have an obscene budget deficit and an even more obscene public debt, cutbacks alone wont make up for it.
"The US badly needs to balance its trade deficit as it is the root cause of all its problems today"
I'm pretty sure our massive overspending had a lot to do with both the trade deficit and the current economic crisis. We have had savings rates that have been near or below zero for several years now. Who's fault is that?