In recent years, “bringing manufacturing back home” has become the slogan for the United States to drive economic growth. However, in terms of the current outbreak of the new crown epidemic in the United States, statistics show that the US ISM manufacturing PMI reported 41.5 in April, far less than the previous value of 49.1, the lowest level since April 2009. stagnant. Overall, the impact of the new crown pneumonia epidemic on the U.S. manufacturing industry has been quite severe, and U.S. economic activities have come to a standstill.
Trump: Intel, TSMC, Samsung come to build factories
According to the latest report from the Wall Street Journal, as Trump is increasingly concerned about the possible impact of production facilities that rely on Asia as a key technology, coupled with the problems caused by the economic impact of the recent new crown pneumonia epidemic, the US government and the Several well-known semiconductor companies have negotiated and tried to persuade several companies to transfer some production to the United States, which will help them build chip factories in the United States to enhance US manufacturing capabilities.
These semiconductor companies include Intel, the largest chip maker in the United States, as well as the world’s foundry giant TSMC, and South Korean chip maker Samsung.
In contrast, Intel originally manufactured chips in the United States, and this time the US government hopes that Intel can build a new factory to further expand production.
In late March, Intel CEO Bob Swan said in a letter to the Defense Department that the company was willing to work with the Pentagon to establish a foundry. William Moss, Intel’s director of public relations, also confirmed the fact that Intel is expanding its production line in the United States, William Moss said: “Intel is in talks with the government to improve the source of microelectronics and related technologies in the United States, and Intel is in a very good position to help. The U.S. government operates a U.S.-owned commercial wafer fab and guarantees the supply of a wider range of microelectronics products.”
TSMC said it has been negotiating with the U.S. Department of Commerce and Apple, one of the company’s largest customers, about building a chip factory in the United States, but has no specific plans yet. The U.S. isn’t the only factory location that TSMC is optimistic about. TSMC is evaluating multiple locations around the world for future expansion.
Once TSMC successfully negotiates with the U.S. government, this will be the first chip factory built by TSMC in the United States, and it will also bring many benefits to local chip companies in the United States. For example, Qualcomm, Broadcom, Nvidia, AMD, Xilinx, etc., all require TSMC to manufacture many advanced products for them.
Similarly, Samsung Electronics has built a chip factory in Austin, Texas. The US government intends to help expand its foundry production business in the United States, but Samsung has not responded to this.
Tesla sings the opposite: do not let the resumption of work threaten to move the factory
Trump is worried about the epidemic and is trying to win over the giants to build new factories and create more production lines to stimulate economic recovery. And here Tesla is blocking the U.S. government.
It is reported that, also because of the epidemic, Tesla’s Fremont headquarters was originally scheduled to resume work on May 8, but the California local health bureau rejected the former’s application. Tesla said it would take legal action and sue California. The Alameda County government asked the court to rescind the county government’s decree denying Tesla’s return to work. “Iron Man” Musk also threatened on Twitter to move the Tesla factory out of California.
In response, a California congresswoman responded that California has given high subsidies to Tesla, but Tesla has always ignored the safety and welfare of workers, and has been destroying unions and bullying public officials. The Alameda County Health Department emphasized that although the state government has relaxed the epidemic prevention ban, from a legal perspective, if the local government has relevant orders, local businesses should obey.
You must know that the Fremont factory is already Tesla’s only car assembly plant in the United States. In 2019, the output reached nearly 500,000 vehicles. It may take more than a year to relocate the entire factory. In other words, if Tesla relocates, it will also cause a lot of damage to the local area.
Is “Made in America” easier said than done?
As early as last year, Apple tried to move the only remaining MacPro production line in Texas to near Shanghai. The reason for the move is very simple. If you arrive in Shanghai, you can save a lot of transportation costs. At the same time, Apple hopes that the US government can exempt the power supply. 25% import duty on related components including units, stainless steel structural housings, circuit boards, self-contained mice and trackpads.
Here’s what Trump thought at the time:
(Screenshot from Trump’s Twitter)
Trump said he would not grant tariff exemptions or reductions to Apple’s MacPro parts made in China. If Apple is made in the United States, there will be no tariffs!
Although the U.S. government strongly hopes that technology companies will build factories in the United States, they must give corresponding preferential policies. This is not bad for companies such as Intel and Apple that have a certain foundation in the United States, but for foreign companies such as TSMC. , there are many risks.
Previously, in order to reduce costs and other factors, American companies transferred a large number of manufacturing jobs overseas, giving many countries with huge population resources the opportunity to rapidly develop their economies. In terms of salary level alone, the salary of American workers is much higher than that of China and Southeast Asian countries. First of all, the salary base is higher. Moreover, the average consumption level of the American society is too high, and the tax revenue is not low, so companies have to pay more for workers. Going to other places has become popular.
In general, attracting giants to build factories, expand production lines, and create more jobs is indeed a way to stimulate economic recovery after the epidemic, but judging from the current epidemic situation in the United States, perhaps epidemic control is the top priority.