Issue link: https://iconnect007.uberflip.com/i/1532052
70 SMT007 MAGAZINE I FEBRUARY 2025 Is that 15 to 16 million the new environment? We'll see. If you balance out the supply chain for automotive, even with easy growth, you're still looking at high single-digit growth over time once you clear the inventory. But without EV, I don't see hyper-growth returning us to the mid- to-high double digits anytime soon. How does the CHIPS Act discussion— advanced packaging, advanced capabilities, and bringing that capability to the U.S.—fit into your view of the market? e premise of the CHIPS Act makes sense, but it doesn't change automotive, for example. Who are the biggest beneficiaries near term? Intel, TSMC, and all your leading-edge IC manufacturers working at seven nanometers and below, which is optimized for processors, radios for smartphones, AI chips, and the like. When the CHIPS Act passed, the news com- mentary said it was to address the shortage and the interdependencies in the supply chain. But it doesn't really do anything to address any of your trailing edge products. It won't fix auto- motive. Power MOSFETs, for example, don't get any benefit from the CHIPS Act. Last year, in Legacy 90 and above, China had 50 fabs. at will soon be 125. At the same time, the U.S. will go from 10 to 14. at's why it's necessarily addressing the trailing edge. We haven't learned the lessons we needed to. There are national security issues and pure capacity issues. The new administra- tion's emerging potential from a tariff stand- point could change nearshoring. In aggregate, when you layer in that nearshor- ing, it has been happening and will continue to do so. It will be measured over decades, not years. In the past 24 years, China has had $4.5 trillion in foreign direct investment, along with whatever China has spent to become the manufacturing capital of everything on the globe. It goes beyond that to ecosystem labor. In the book by Walter Isaacson about Steve Jobs, Jobs said he'd love to make the iPhones in Wisconsin or whatever state he picked, but can Foxconn build a factory that could run 24/7/365 and crank out the same vol- ume? It's not the cost issue of being here, but a skilled labor issue with the people who want to work. ere are some bigger elements in play that we've got to figure out. I think the appropriate push on educational institutions was also absent from the CHIPS Act. Go through the history of how TSMC was built. ey built the fabs and everything else, but they partnered closely with universities. ey created a curriculum to create fab tech- nicians. It was an all-encompassing strategy. at's where we have a lot of work to do. I like the Steve Jobs example. You can have the capacity you need in the U.S., building out advanced packaging, but if you don't have circuit board fab, electronics assembly, and the rest of the manufacturing chain stimulated and lined up as well, you're still dependent on other parts of the world. You're still not in control of the ecosystem. ere's not a clean break from China anytime soon. It took 20-25 years to create the environ- ment we find ourselves in, yet everyone seems to have an instant gratification mindset that we can just wave a magic wand and fix everything right away. at's not reality. All the efforts have been piecemeal. ey all must happen for various reasons, but I don't see a clear path to resolution any time soon. SMT007 Dennis Reed