“DEI Killed The Chips Act”

In China, the money got wasted because the fund managers and bureaucrats dispensing the money seemed to have no idea of who was a genuine semiconductor operator and who was a chancer setting up as a semiconductor operator  just to get the hand-out,

As in China, so in America incompetent execution looks like it’s going to scupper the purpose of the act.

For some months now it has been obvious things weren’t going right in the US because Chips Act funds weren’t getting through to the right people – the people who would be building and operating the fabs.

Now, in an article  called “DEI Killed The Chips Act” published by The Hill a Washington newspaper and web-site dealing with political issues, the blame is laid at the door of DEI – Diversity, Equity and Inclusion – what we call Diversity and Inclusion.

The article is written by Matt Cole CEO and and Chief Investment Officer at Strive Investments and Chris Nicholson SVP and Head of Research at Strive.

The authors point out that chip companies are cooling on announced fab investments in the USA – Intel delaying Ohio, TSMC delaying its Arizona fab  and Samsung delaying a Texas fab.

“This is not the way companies typically respond to multi-billion-dollar subsidies,”  say the authors, “so what explains chipmakers’ apparent ingratitude? In large part, frustration with DEI requirements embedded in the Chips Act.”

Instead of the US, TSMC is intending to build three fabs in Japan, Intel is looking to invest in Israel, Ireland, Germany and Poland and Samsung looks to be redirecting its investment funds back home to South Korea.

“The Chips Act’s current identity as a jobs program for favored minorities means companies are forced to recruit heavily from every population except white and Asian men already trained in the field,” say the authors, “it’s like fishing in all the places you aren’t getting bites.”

“The world’s best chipmakers are tired of being pawns in the Chips Act’s political games,” conclude the authors, “they’ve quietly given up on America.”