On the most recent Bring It Home Podcast, host JP Hampstead spoke with Julius Krein, founder and editor-in-chief of American Affairs, about U.S. industrial policy post-CHIPS Act.

The CHIPS and Science Act of 2022 aims to bring microchip manufacturing back to the U.S. after several decades of companies offshoring the technology.

According to a report by the Council on Foreign Relations – a nonpartisan think tank headquartered in New York – the U.S. produced 40% of the world's semiconductor supply in 1990. Today, the U.S. produces only 12% as Taiwan has ramped up to over 60% of the world's supply of semiconductors.

Krein dove into the historical context, challenges and prospects of America's industrial strategy. He described U.S. industrial policy as targeted interventions aimed at boosting specific sectors to improve economic competitiveness and national security. 

He also critiqued traditional views that often portray such policies as economic externality management, arguing instead that U.S. industrial policy should strategically lower the cost of capital for essential projects to boost growth.

Krein said the CHIPS Act has had its limitations, pointing out its short-term focus and lack of a mechanism for ongoing policy adjustments. He said that mechanism would be vital for the long-term competitiveness of the U.S. semiconductor industry.

"I think the CHIPS Act was necessary," Krein said. "But in sort of design and execution, I think it had two problems: one in terms of policy design, one in terms of more framing and rhetoric."

"I think it's a critical sector, but I'd like to think or at least hope that we could do both a lot better on policy design as well as kind of building a larger framework and ecosystem for all of these projects," he continued.

Other headlines discussed in this episode included:

Recent announcements of large investments by tech conglomerates in the U.S., including Taiwan Semiconductor Manufacturing Co.'s commitment to extending its semiconductor manufacturing operations with a $100 billion investment.

Apple's intention to expand its U.S. manufacturing footprint with a $500 billion investment, focusing on enhancing its supply network. 

The Stargate project, a joint venture by OpenAI, Softbank and Oracle aimed at developing AI infrastructure with a $500 billion pledge, reflecting broader trends toward investing in AI as a catalyst for new business models. 

Bring It Home dives into emerging industry trends and the push for reindustrialization in North America. The podcast is available on YouTube, Spotify and Apple Podcasts.