Packaging, supply and logistics
Japan’s largest chip factories. But events like that are overshadowed by broader supply chain issues. Between congested ports and a lack of lorry drivers, delivery times have reached record highs on both sides of the Atlantic.
“You’re always going to have people who take every issue and want to frame it in terms of criticising political opponents – so a lot of government action is to forestall or preclude that type of criticism.”
Robert Lewis
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Sharing the supply chain In June 2021, the US Senate showed that bipartisanship wasn’t quite dead, and passed the Creating Helpful Incentives to Produce Semiconductors for America Act by a majority of 36. Thankfully known as the CHIPS Act for short, the legislation promises, according to the US commerce secretary, to “revitalise” the US semiconductor industry in a dangerous world. Perhaps more remarkable than the ends, however, are the CHIPS Act’s means. Abandoning America’s long tradition of free market enterprise, the law mandates $50bn in state subsidies for domestic semiconductor investment. In practice, that encompasses the creation of a National Semiconductor Technology Centre, as well as research into new technology. Nor is Capitol Hill alone. In Europe, Italy, France and a number of other EU countries plan to jointly pump $145bn into the continent’s own chip manufacturing capabilities. To a certain extent, Lewis understands this approach, emphasising that onshoring essential chip production is widely seen as a “national security issue.” Given how crucial chips are to medical manufacturing – let alone a raft of other industries – why wouldn’t governments want to nationalise them? For Lewis, an answer begins with pure pragmatism. As he points out, the passing of the CHIPS Act caused America’s rivals in Beijing to strike back, hoarding Chinese chips and exacerbating the shortage. More fundamentally, Lewis wonders whether the dash to shore up domestic production is missing the point. “You have the US panicking that it doesn’t control the whole supply chain,” he says. “But actually, it pretty much does.” A fair point. Over four-fifths of current chip production may sit across the Pacific, after all, but both South Korea and Taiwan are stalwarts of the Western alliance. And even if the People’s Liberation Army occupies Taipei tomorrow (a remote possibility given events in Ukraine), America’s mega corps could soon take up the slack. According to one report, private firms like Nvidia and IBM plan $834bn in new chip capacity over the next decade, easily dwarfing the $50bn offered by Congress.
108 Medical Device Developments /
www.nsmedicaldevices.com
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