There are many myths about the chip business, which give Americans much comfort.
- It's an American lake.
- It's all about the microprocessors
In fact, as iSuppli notes, only half the top 10 semiconductor firms last year were American. Microprocessors represent only a small part of the business these days.
Here's another myth. Intel is in trouble.
Again, false. According tot he same report AMD actually lost ground last year to Intel.
The real problem with the chip business is that it's dirty, filthy dirty. The caustic chemicals used in chip manufacturing are hell on the environment. As a result, the production side of the business was exported long ago and many countries -- especially Taiwan and China -- have taken advantage of this fact to achieve dominance.
The only area where U.S. companies are showing really good growth are among "fab-less" chip companies. These are outfits which don't have manufacturing capability at all. Most of their stuff is made in, again, China and Taiwan. The two three outfits in this area -- Qualcomm, Broadcom, and Nvidia -- are all American.
The semiconductor business depends heavily on absolutely free trade. This lets companies produce where salaries and environmental restrictions are lowest, resulting in low prices. But it is terribly short-sighted. You're still poisoning the planet and doing nothing to end it, let alone fix it. And you're giving foreign powers the ability to strangle the U.S. economy at a stroke.
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