While all the focus in the past week has been on a , significant problems for America’s when premier semiconductor firm, Intel, which laid off 15 % of its work power, hidden from view is another wrongdoing – a$ 3.9 billion project to build a ,” secure area” semiconductor , manufacturing , service. Considering that Intel now operates a semiconductor factory in Arizona, it is likely to discover this facility.
If you are about to ask what will be produced at this facility, do n’t bother since the project is classified. It’s not difficult to understand what is happening and why it’s a big mistake ( like the$ 59 billion investment that will primarily fund foreign and domestically held companies ‘ establishment of facilities in the US), despite the hidden details. Because the CHIPS Act is a nonpartisan waste of money, only the weak tax will (once once ) been robbed.
Some of the foreign companies financed under the CHIPS Act are: Samsung ( Korea ), TSMC ( Taiwan ), Global Foundries ( UAE), BAE Systems ( UK), Global Wafers ( Taiwan ) and Amcor ( Australia ). Because all of these businesses have a lot of money, US wealth is not required.
The Secure Enclave project is based on a single knowledge record that, like the project itself, is classified.  , However, the gist of the intel-report is that an adversary could get into a semiconductor manufacturing plant ( a fab ) and somehow insert bad code into the chip manufacturing process, aka spyware.
The CIA continued to claim something like this may occur despite the fact that there is no conclusive evidence that any commercially produced device has ever been compromised. We are actually betting billions of dollars on subpar knowledge without any factual proof to back it up.
Some Pentagon and intelligence officials have been having a dream about the need to thoroughly specialist microchips for some time. It is apparent that this issue may occur because the majority of the chips in the US military and intelligence systems are made in Asia. It was fueled by some Foreign devices and other devices, including surveillance cameras, which were discovered to possess backdoors, allowing the Chinese to monitor defense, brains, and government operations.
The easy solution would be for the state to buy just made-in-America materials with made-in-America cards. What appears to be common impression did not appeal to state buyers, according to  .  , They doubled down buying more and more products either chock full of Chinese-made components– or, even worse, only buying Chinese items off the shelves.  ,
A good example is security devices. The defense left after it was widely known that cheap camcorders made in China had backdoors, either purchasing more for basic security and other programs, or avoiding disposing of the damaged goods, yet after receiving an order to do so.
People who compromises cards made for martial and intelligence software is supposed to stay away from the protected area.  , This means that the manufacturer will have solid protection. This is a significant issue because many of the US semiconductor industry’s workers are immigrants from abroad, whether they are from India, Pakistan, or from Asia’s farther east ( including China ).
By 2030, according to The Semiconductor Industries Association, the CHIPS Act ( without secure enclaves ) will call for 115, 000 new workers. Says one statement:
Companies will need to increase their hiring drastically in the field to meet these ambitious figures. A two- or four-year degree in engineering or computer knowledge may be required for many of these positions. Early research has revealed that the network for US individuals is insufficient. In order to close the hiring gap, many businesses will probably turn to foreigners and employ and maintain international students.  ,
One out of every five tasks, even more, will likely be filled with immigrants who are qualified in STEM fields (science, technology, engineering, and mathematics ).
If the service is classified, the stable enclave cannot employ foreigners. Finding US residents with the knowledge necessary to work in a crowded and understaffed shop in Arizona may prove to be the secure area program’s Achilles heel. ( US defence companies also are facing hiring deficits. Does anyone really envision signs advertising jobs for building submarines at a Yankees game?
Assuming the income is used to actually create a secure service, it will be a pretty low-volume producer of specific components.  , This means the price per device may be celestial.  , The CHIPS income in no way fixes that trouble. This results in a completely out-of-control increase in the cost of weapons ( and it is already on par with defense goods being significantly overpriced and less and less affordable even for “rich” nations ).
There are other issues, also. A specialized factory wo n’t be in competition with the commercial sector, so its products are likely to fall far behind the latest technology and do so quickly. This implies that the safe neighborhood did eventually create outdated and overpriced junk.
But it gets worse.  , Everything is for completely.  , To stay Secure Enclave worthwhile, the government will need to encourage the Enclave’s customers to buy undervalued and poor safe products. Why would any defense company pay outrageous prices for parts that can be purchased for sale for less than that?  , And why would it opt to put inferior parts in its equipment?
Intel has recently developed a couple of new processors that incorporate an artificial intelligence , engine.  , The idea is to equip a new generation of PCs ( personal computers ) with built in AI.  , The first new product is called Meteor Lake.
Intel is manufacturing the chip at its plant in Ireland, not in the United States.  , According to reports, Intel is having trouble making the chip and is losing billions of dollars.  , Its superior follow-on chip, called Lunar Lake, also has been outsourced, but this time to Taiwan Semiconductor ( TSMC).  , Intel ca n’t make it and wo n’t.
Intel’s stock is in the tank, the company has stopped paying dividend and it is laying off 15, 000 workers. It is not unfair to say that Intel will lose a net of 25, 000 jobs as a result of the problems the company is facing and the lack of thorough corporate vetting by the Department of Commerce, which is awarding out CHIPS money, and that Intel’s products will need to be outsourced for the company to survive.
Intel’s saga is likely to be repeated by many other semiconductor companies that are getting , handouts , under the CHIPS Act.  , There is no guarantee any of them will end up being competitive.
Many of the foreign companies are excessively rich: so the CHIPS Act is just a bribe for them to locate manufacturing , in the US.  , Many of them, including TSMC, are not going to bring state-of-the-art production to the US for two reasons:
- They will want to maintain the company’s control over their best technology without risking losing it in the US.
- TSMC will want to keep US export controls on its market.
Why take a chance on yourself by getting paid for something you do n’t need?
Nothing in this is to suggest that the$ 59 billion CHIPS Act investment will yield nothing positive. Refuse to think about it if the goal is to fund domestic manufacturing by funding foreign and domestic businesses.
Former US deputy undersecretary of defense Stephen Bryen is a recognized authority on security strategy and technology.
This article was first published on his Substack, Weapons and Strategy. It is republished with permission.