Biden's chip dreams face reality check of supply chain complexity

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How is it Biden's job to tame a semiconductor shortage?

Why is there a global chip shortage? Did producers underestimate demand?

But industry executives say....

Don't listen to them. Most have a vested interest to shift economic power to China, Vietnam (communist states) and others in Asia and away from the West.  

How is it Biden's job to tame a semiconductor shortage?

Because he is taking the first steps in a national industrial policy, as what China has. The US-based multinationals have one foot out the door and when it comes to modifying the global supply, they can't be trusted to act in their nation's interest.

The Democratic President will enact policies to try to build up a domestic chip industry. Then, the next time there is a Republican President, he will enact a policy giving tax breaks to companies that move their manufacturing facilities overseas.

We see something similar in foreign policy. The Democratic President will try to foster the growth of democracies around the world, and then a Republican President will enact policies fostering the growth of dictatorships, so long as they are friendly to American short term interests.

Supply chain complexity, is the ruthless necessity to drive down costs.

From the Fabs to the back-end factories, creates a Gordian knot within the intricate process of chip manufacturing, the reality means months of delays.

On time deliveries define a need to assess the objectivity of supply-chain performance.

The supply chain, the sheer scale will define the front-end/back-end processing lead times.

This is the fag end, cost factoring crudeness of globalization, at its most cruelest

Shorten the supply chain.

Why is there a global chip shortage? Did producers underestimate demand?

Bloomberg News has a good article explaining it with graphics

"How a Chip Shortage Snarled Everything From Phones to Cars"

https://www.bloomberg.com/graphics/2021-semiconductors-chips-shortage/

“Trying to reconstruct an entire supply chain from upstream to downstream in a single given location just isn’t a possibility," David Somo, senior vice president at ON Semiconductor, told Reuters. "It would be prohibitively expensive."

This is the same greedy justification to defend the indefensible.

The offshore mentality to squeeze every cent out of the supply chain.    

Don’t worry some sweatshop will sort it for you.

That process is very labor intensive, leading chip companies to outsource it decades ago to countries including Taiwan, Malaysia, the Philippines and China.

The chip supply chain is complex.

At the start you have process one, in country one

Shipped to country two for process two

Shipped to country three for process three

Shipped to country four for process four

The number of process for each different chip design can be much more.

Then as has been a fire in one part of a chain, that cut down supply of that chip.

The steps from to finish chip are not done in the same country.

Maybe not even in the same continent.

Too many steps seperated by many miles (kilometres) increasing time to make each type.

So when something happens, it hits the aviability of the chips.

In other words, Mr. Biden is dangling a $50 billion bribe to these executives, who will know which political party is responsible for the largesse.