You cannot move a chip factory to America without three other countries
A chip factory looks self-contained, but it depends on suppliers in three countries arriving together.
WSJ What's News · Violent Rioting Sweeps FranceBringing chip-making back to America does not mean building one factory. It means rebuilding an entire ecosystem.
That is the account JPMorgan Chief Executive Jamie Dimon gave after his bank studied the chip-building ecosystem, alongside shipbuilding and farming. To put his examples together in plain terms, the three other countries involved are Japan, Korea, and the Netherlands. One way to picture his point is that a modern chip plant is not self-contained. It depends on suppliers in other countries, and the examples he gave show why.
In Dimon's description, chip-building needs chemicals from Japan and what he called "stuff from Korea." Then it needs what he named as ASML's etching equipment from the Netherlands. ASML is the Dutch maker of the machines that print circuits onto chips.
As Dimon put it, "You just can't move stuff."
That is why Dimon called the job "far more complicated than build a ship." JPMorgan has identified about 4,500 companies tied to this security and resiliency push, and has hired bankers to cover them. Policy is "a big deal," he said, especially how to "get the government to make purchases bigger."
Dimon's argument implies the United States cannot simply pay for a domestic fab, or chip factory, and declare independence. Bringing chip-making home would mean rebuilding the whole network of suppliers, from financing suppliers to training workers and vendors, so the needed chemicals, supplies, and machines arrive together.
Questions people ask
What is ASML, and why does everyone need its machines?
ASML, based in the Netherlands, is the only company that makes the most advanced machines that print tiny circuits onto silicon wafers using extreme ultraviolet light. Chip-makers like TSMC, Samsung, and Intel cannot make leading-edge chips without them, which is why one Dutch supplier matters to factories everywhere.
What kinds of chemicals does Japan supply for chips?
Japan produces many of the high-purity chemicals, resists, and silicon wafers needed to make chips cleanly and reliably. Those materials require years of know-how and strict quality control, so they cannot be replaced overnight by a new supplier.
How much does it cost and how long does it take to build a chip plant in the US?
A leading-edge fab can cost $15 billion to $20 billion or more, and takes years to build and qualify. The bigger challenge is operating it profitably, which requires steady customers, skilled workers, cheap power and water, and nearby suppliers for parts and maintenance.