U.S. efforts to boost domestic semiconductor manufacturing will have a positive impact on domestic innovation, in part by ensuring tech startups have the resources they need to scale new technologies, industry experts said.
In turn, they said, startups that depend on a stable supply of semiconductors could attract more private market investors as chip availability becomes less vulnerable to the kind of supply chain disruptions caused by the Covid-19 pandemic or invasion Russia’s Ukraine – Risk Reduction for Venture Capital Investors.
“Two guys in a garage is great,” said Edlyn Levine, co-founder and chief science officer at America’s Frontier Fund, a nonprofit venture capital fund aimed at investing in chipmakers. But taking that idea and scaling it into a business requires access to multi-billion dollar facilities, she said.
Ms. Levine said Tuesday at the Wall Street Journal’s online CIO Network Summit that a robust domestic semiconductor industry can help unleash downstream innovation. Chips are a key component of technologies including 5G wireless devices, artificial intelligence software, autonomous vehicles and cryptocurrencies, she noted.
The non-partisan Chips and Science Act, which Congress passed in July, is going to go a long way toward encouraging innovation, Ms. Levine said. Among other things, the bill provides subsidies of almost 53 billion US dollars for the construction or expansion of semiconductor factories – so-called fabs – in the USA
Earlier this month, Intel corp
Groundbreaking for a $20 billion semiconductor plant near Columbus, Ohio, with Intel Chief Executive Patrick Gelsinger supported by Ohio Gov. Mike DeWine, a Republican, and President Biden.
In a speech in Ohio, Mr. Biden said that advanced technology invented in America must be manufactured here, rather than being offshored, to reap the full economic benefits.
Mike Burns, a partner at venture capital and private equity firm Murray Hill Group, said at Tuesday’s CIO Network event that when it comes to competing with China for leadership in technologies like AI or quantum computing , “everything depends on availability of semiconductors.”
“This is a strategic issue for national and economic security,” he said, adding it is encouraging that US lawmakers are open to defining industrial policy, particularly in the form of subsidies and tax breaks for US manufacturers, measures , which critics say could distort markets.
But in a capital-intensive industry like semiconductor fabs, where other countries have long supported private manufacturers, “it’s problematic that the US isn’t involved,” Mr. Burns said.
write to Angus Loten at [email protected]
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