This is why we can't have nice things
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It's Still Hard to Build Things in the US
The world's leading manufacturer of advanced chips is TSMC in Taiwan. Back in 2020, President Trump helped convince TSMC to make a major investment in building chips here in the US, specifically in Arizona.
Taiwan Semiconductor Manufacturing Company has agreed to build an advanced chip factory in the United States, in a response to the Trump administration’s growing concerns about the security of the global electronics supply chain and its competitive tensions with China.
The decision by T.S.M.C., which operates enormous plants in Taiwan to produce chips used in most smartphones and many other devices, was confirmed late Thursday after earlier press reports.
T.S.M.C. said the factory would be built in Arizona, with unspecified support from the state and federal government. T.S.M.C. estimated its own investment in the plant from 2021 to 2029 at $12 billion...
In fact, that $12 billion investment was just the start. TSMC is now planning to spend more than 10 times that building multiple fabrication plants or fabs at the site north of Phoenix. The first of those is already opening and operational. The second has just completed construction. This story is from April:
Taiwan Semiconductor Manufacturing Co. completed construction of its second fab at its north Phoenix campus ahead of schedule to meet AI-related chip demand from customers, the company’s top executive said on an April 17 earnings call.
TSMC CEO C.C. Wei said the company is “working on speeding up the volume production schedule” for its second fab, which will utilize 3-nanometer process technologies.
Things may be ahead of schedule but this week the NY Times reported that the complexity of building these factories has turned out to be far greater than the Taiwanese company expected. It's a lengthy story but certain issues crop up repeatedly, an almost impenetrable thicket of regulations and complaints from unions.
The process that has turned a blank spot on the map into what some now call the Silicon Desert underscores a defining feature of American life: A tangle of bureaucracy often hinders ambitious visions, sowing confusion, uncertainty and delay. That tends to reinforce inertia and discourage development...
At home in Taiwan, TSMC is used to moving aggressively, gaining whatever resources, personnel and government approvals are required to propel its astonishing expansion. Yet in Phoenix, TSMC and its suppliers have wrestled with the intricacies of a different system.
They have been tripped up by a confusing process to gain permits. They have struggled to find workers with needed skills. They have contended with higher costs of doing business, succeeding through force of will and vast sums of money.
In Taiwant, where TSMC is by far the most powerful company, things are different.
In Taiwan, TSMC and its suppliers build facilities in dedicated industrial zones that generally require one permit from a central authority. In Arizona, they must negotiate municipal, county, state and federal regulations, requiring thousands of approvals.
“Every step requires a permit, and after the permit is approved, it takes at least twice as long as in Taiwan,” TSMC’s chief executive and chairman, C.C. Wei, said this year at National Taiwan University.
The company was required to gain permits from city and county authorities to comply with state and federal regulations. In many instances, regulations for its industry did not exist at the local level, so TSMC had to convene a team of experts to craft its own language and gain approvals.
“We ended up establishing 18,000 rules, which cost us $35 million,” Mr. Wei said...
That’s the sorry tale of just one factory in one industry; multiply that by the costs and delays imposed on all construction projects, from housing to infrastructure, then extend it to the regulatory burdens on all commercial activity, and you get an idea of just how much we’re dragging down our economy.
While we’re on the subject, how about unnecessary and irrational occupational licensing laws for such dangerous jobs as eyebrow threading (weaving hair into eyebrows to make them thicker) or, my favorite, annual motor vehicle “safety” inspections: 14 states require them, 36 do not, and there is absolutely no difference in the accident rates between them:
AI Overview
Multiple studies and government reviews have consistently found
no statistically significant difference in crash rates or safety outcomes between states with and without mandatory annual vehicle inspection programs.
Key findings from various sources include:
A 2015 Government Accountability Office (GAO) review of six studies published since 1990 found no causal relationship between inspection requirements and crash rates, fatalities, or injuries.
Research conducted by the National Highway Traffic Safety Administration (NHTSA) demonstrated that only about 2% of motor vehicle crashes were caused by vehicle component failure. The vast majority (around 94%) are attributed to driver error.
Some states that eliminated their programs, such as Nebraska and New Jersey, found no increase, and in some cases a slight decline, in defect-related accidents after the mandate was removed.
Despite these findings, state officials in inspection states often maintain that the programs improve vehicle condition by requiring repairs and thus enhance safety, even if data on accident rates does not conclusively support it.
The consensus among many researchers and policymakers is that mandatory annual inspections do not provide a measurable road safety benefit that outweighs the costs and burdens placed on citizens, particularly lower-income households.