00:00Stephen Izzal is the Vice President for Global Innovation Policy at the Information Technology and Innovation Foundation.
00:07He joins us now. Hello, Stephen.
00:08Now, if the U.S. does go ahead with sky-high tariffs on microchips,
00:13what is that going to do to a truly globally integrated industry?
00:20Well, it would have numerous negative consequences.
00:24I mean, first, it would significantly raise the cost of virtually every single product in the world,
00:29which is everything that uses a semiconductor.
00:32So businesses and consumers across the world would be hit by higher cost for goods.
00:38Now, to the industry itself, it would certainly disrupt carefully calibrated supply chains
00:43that have been implemented over dozens of years.
00:48Semiconductor is the world's fourth most traded product.
00:52The product and specialization that we've seen in this industry
00:56has what has enabled the constant increases in semiconductor capacity
01:01and decreases in cost, and there's a Moore's law.
01:03So tariffs would be very deleterious to the global semiconductor ecosystem.
01:08Trump, of course, is hoping these tariffs will give the U.S. a home ground advantage.
01:12But how difficult is it to actually build a chip hub?
01:16Well, it's extremely difficult.
01:20You know, even just building a semiconductor fab itself takes three to four years,
01:26and it entails the integration of hundreds of thousands of parts and components.
01:35Your previous interview talked about ASML.
01:38Now, the laser alone in an ASL machine has 470,000 parts.
01:43So really it's about the ability of these companies to orchestrate complex supply chains
01:48to get all these components into a factory.
01:51And if we raise semiconductor tariffs, it's only going to make this process much more expensive,
01:58much more complicated, and it will make the United States globally uncompetitive
02:03in the manufacturing of semiconductor goods.
02:06What that will essentially lead to is, yes, we'll have some more fabs,
02:09that will have a higher prices for semiconductors in the United States,
02:12and our firms will be uncompetitive in global markets.
02:15President Trump has said in the last few days that the government's thinking of buying a stake of Intel.
02:20Do you think that's part of the strategy to almost partly nationalize the industry?
02:25I don't think we're talking about full nationalization, right?
02:34Or the forms of industrial policy that Europe has used in the past,
02:38where, like, France created a company called GroupBull to compete with IBM,
02:42and that's nationalization, so to speak.
02:44I think this is more of state corporatism than nationalization, per se.
02:49You know, with that said, I think it would portend an unfortunate trend
02:55that should not be carried any further than an investment in Intel.
03:01Thank you so much for speaking to us.
03:03Much appreciated.
03:03Stephen Izzel is the Vice President for Global Innovation Policy
03:07at the Information Technology and Innovation Foundation.
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