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00:00When you look at what's going on in D.C. the White House summit bipartisan support perhaps for legislation. Do you see policy momentum building towards something that could bring about meaningful change. Well I think what we're witnessing is a development of an understanding of the issue. OK. Now I looked at the summit today and I said OK we have some very diverse interests there and there are actually a couple of issues underneath there. One is kind of technological leadership and the other one is supply chain resilience and dependency on overseeing its manufacturers. In a time where is affecting a lot of output in the auto industry and a lot of jobs. Right. So I think that is the process. You know there seems to be a lot of support for the problem. There seems to be movement for spending a lot of money on the problem OK. But it's kind of the answers aren't clear yet. What. I mean it's not just the US is looking at spending a lot of money on the problem here in Europe they're talking with that digital compass as it's known to be putting subsidies to work in Europe and even less of a reason here. Because no one's making phones in particular. No one's making consumer electrical but they're awesome. Some good equipment makers chip equipment makers in Europe. But is it the right thing to be subsidizing right now to be making it on your own soil. Well the global industry in semiconductors is very interdependent. We depend on European tool makers and sources of a lot of intellectual property. We depend on American designs. We depend on Asian manufacturing. Parts come from all over the world. Tools come from all over the world. It's highly interdependent. So I think to say we want complete self-sufficiency is kind of a pipe dream for almost everybody. OK. The theme that does emerge though is we've been through a period where a supply chain. Supply chains that really suffered in the last especially last six months in semiconductors. OK. So now there's a question just like what's a good solution to that problem. Right. But that's little this little difference. I want to be completely independent. So I'm curious. I mean we talk about the idea of boosting capacity here in the US and then you always tend to forget that we also have we already have I guess a relatively robust chip manufacturing sector here in the U.S. whether you're talking about your Intel's of the world or Texas Instruments or even go down and you look at things like serous logic and for a vote when some of those names these companies exist they certainly have the technology. They certainly have the brainpower. What is holding us back as a nation from just sort of ramping up to a level that would meet our demand needs. Well you rightly point out that there are some sectors where I think we're really quite strong. You know there is this sector called analog mixed signal after electronics components where U.S. cheerful manufacturing is probably around 30 percent. TEI analog devices. Nice like that there. There are leaders where the leadership has changed hands in the last decade has really been on high end logic. The things that go into you know your iPhone baseband processor although I will point out that you know chips from the or horrible is in a company like that go into your iPhone as well. They handle the radio part. OK. So what we need is kind of a little more resolution on who the players are and where the problems are. We suffer from a competitive high end because Intel has fallen behind. OK. But you know we've also suffered over the last year and I'd say this problem has been almost three decades in the making where we don't like manufacturing in this country when it's extremely capital intensive. Right. A lot of investors are kind of allergic to capital intensity. Right. So it's like a focus on the design part shift that manufacturing overseas where somebody who might be willing to do that. And now all of a sudden we see a couple companies overseas who've amassed a lot of capabilities a lot a lot of skills that actually can make some good money out it. And it's like oh maybe we shouldn't have done so much for. So the whole reason we're talking about the chip shortage for the cute chip shortage this year it actually stems from the automakers and the part that they're missing are not high tech. In fact they might cause like a dollar h. But as you've identified a real weakness has really emerged at the high end. So is there I mean you look at what's going on in the White House today of these car companies but their need is not necessarily the really advanced stuff like you're talking about when thinking about strategy. Where should we focus our efforts. Is it on the sort of like basic stuff so that we don't run into another shortage or the car companies. Companies can't make a basic you know the basic displays or the real complicated difficult stuff. Well as a country I think we need to invest in capability. It's right. And a lot of that comes from research and development on the front end. That's where U.S. historically has led the car companies are in trouble because they share a manufacturing base. All right. So if you're if you're one of the big Detroit automakers and you buy parts or semiconductor parts from the automotive chip suppliers one of the shocking discoveries which probably shouldn't have been that big a surprise was that when you go down several layers in the supply chain it's like ups. I share kind of the same supply base. OK. And I'm competing with Sony PlayStation Fives and competing with iPads completing with competing with TV sets for the chips that drive the flat panel monitors and stuff like that. So the same kind of shared supply base which has been kind of a surprise. OK. Now we have given up a lot of that capacity although we still have some in the U.S. I mean chip manufacturers like Alix Steel Semiconductor I mean they they have fabs in Chandler and Phoenix and in Austin Texas. OK. And so you know there's still some of that manufacturing of the U.S..

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The Answers Are Not Clear Yet on Semi Shortage : Willy Shih

President Joe Biden told companies vying with each other for a sharply constrained global supply of semiconductors that he has bipartisan support for government funding to address a shortage that has idled automakers worldwide. Willy Shih, professor of management practice at Harvard Business School, speaks with Bloomberg's Caroline Hyde, Romaine Bostick and Joe Weisenthal on "What'd You Miss?" about the semi shortage. (Source: Bloomberg)

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