The CHIPS Act

The President’s Executive Order 14017, “America’s Supply Chains” has resulted in legislation, the CHIPS Act, looking to spend $52 Billion dollars to correct supply chain issues. Which can also read as, correct U.S. manufacturers having made unbelievably stupid decisions about offshoring manufacturing capabilities for even higher profit margins than they were making already. (The U.S. share of global semiconductor production has dropped from 37 percent in 1990 to 12 percent today and is projected to decline further).*

At face value yes, it is an issue that I think needs to be corrected. I just struggle with spending my tax dollars correcting a situation that many industry experts, INCLUDING MYSELF, predicted U.S. Industry was shortsightedly creating.

Full disclosure, I was a part of the electronics manufacturing service industry that offered offshore EMS services. A caveat to that issue is that I always advocated it as part of a bigger plan. Meaning being strategic about it, not just chasing cost savings, that in some cases, were not even there. But if the boss reads in the WSJ that everyone else is going offshore and says we should go offshore, you make the numbers work for going offshore to keep the boss happy (and preserve your job).

Now, after offshoring a massive amount of U.S. Industry Intellectual Property (IP), capability, and capacity, we come to the realization that: 1) Shipping all that off shored stuff back to the U.S. has logistical consequences, AND 2) Not being able to provide technical services and processes is inherently dangerous to both national economic integrity AND national security.

I make decisions about PlastiCert business every day. I do not see anyone offering me money to correct any big blunders I have made or will make.

So yes, let’s fix the situation.

That being said, it is my hope that we DO NOT just throw money at the people that caused the problem in the first place. Meaning, let’s not pay them for showing unbelievably bad judgement and making bad decisions. They did it once, let’s not give them a chance to recoup their losses and make bad decisions again.

*From the BUILDING RESILIENT SUPPLY CHAINS, REVITALIZING AMERICAN MANUFACTURING, AND FOSTERING BROAD-BASED GROWTH Report delivered to the White House pursuant to Executive Order 14017, “America’s Supply Chains.”