…but in my analysis, it has only become more true:

The only way to success in American public life lies in flattering and kowtowing to the mob.
   -H. L. Mencken (1880 - 1956)

One of the blogs at ZDNet.com points out something I have been aware of for quite some time, but haven’t posted upon. Perhaps I should start making some noise. From Tom Foremski: IMHO, “US chip leadership is in trouble - but business is good“:

The bad news is that US is likely to lose its lead in chip manufacturing expertise and that could be catastrophic to the US economy. The SIA and the chipmakers and other groups are lobbying hard in Washington D.C. to make sure that the US funds more basic research, invests in education so it has a highly skilled workforce, and can provide new ways to finance multi-billion dollar fabs.

“There is no other industry like the chip industry that has created so many jobs, and has contributed so much to the GDP of this country,” said Mr Scalise. So far so good, I said. Why should we be so concerned about the future when the US chip industry is doing so well?

Mr Scalise and the others, pointed out that it is becoming more difficult to manufacture in the US because of fewer science and math students, and the economic incentives are much less than those offered in other countries. Yet each chip fab provides significant economic value to the host country because of the infrastructure that grows around it. Many other countries recognize that benefit and are offering significant incentives for chipmakers.

One worrying trend is China. Mr Scalise and his team recently returned from a fact finding trip to China. He said that SMIC, the country’s largest chip maker, is able to take advantage of sweetheart financing deals. The government of a large province in China is building billion dollar fabs and it will lease them to SMIC. This means SMIC doesn’t have to raise billions in capital markets to finance its expansion. This is a significant competitive advantage for SMIC.

The reason I had an expatriate assignment in France was because the newest fab (aka “wafer fabrication factory”) for my company (Freescale Semiconductor) is there, in large part because of tons of subsidies from the French government. Many fabs are being built in China, as Foremski notes in his post. Aside from jobs lost in the US, do we really want to be exporting the basic technology that powers our smart-bombs, guidance systems in our tanks, fly-by-wire systems in our jets, essentially all the technology that gives our military a huge advantage on the battlefield to a power that arguably will be our greatest rival in the 21st century?

My vote would be no, even if my future employment prospects were not affected.

What do you think?

For want of a nail…