Gov. DeSantis Takes Swipe at China for Threatening Supply of Microchips Before Announcing Chip Manufacturing in Florida

Toby Hazlewood

There are shortages, but China isn't the issue

In a speech addressing manufacturing in the state of Florida on January 5, Governor Ron DeSantis singled out the Chinese Communist Party for its role in the microchip and semiconductor shortages currently faced in the US and around the world.

China's role in withholding supplies of chips, together with the copyright and intellectual property rights infringements were stated by the Governor as reasons to promote new manufacturing within the state.

Is China really the problem though?

The Governor's reference to China and their Communist leadership was right on message for the Republican Party playbook in blaming communism, but he wasn't accurate. According to data from 2021, just 6% of semiconductors manufactured are produced in China.

South Korea is responsible for producing 63% of the world's microchips, while Taiwan-based firm TSMC produces a significant volume of the world's chips, for technology manufacturers including Apple, Intel and Nvidia.

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Semiconductor manufacture around the worldvisualcapitalist.com

A boost for Florida's manufacturing industry

Regardless of whether China is to blame, the $10 million investment announced by Governor DeSantis on January 5 will be a welcome boost for the state.

The funding will be targeted towards Osceola County and Valencia College, in part to develop infrastructure around the Neocity technology district as well as $3.7 million for Valencia College so it can develop a new program that will train students in utilizing robotics technology for semiconductor manufacturing.

Supply chain issues remain

Since the initial disruption caused to global supply chain by the pandemic, shortages of goods continue to affect Florida and all of the US. A significant proportion of manufactured goods and raw materials (including microchips) are routinely shipped to the USA from China and other countries in Asia.

The issue is that normal services have been disrupted by shortages of container ships, a lack of the containers themselves, or because ships simply haven't been able to dock and unload thanks to backlogs at many US ports including in Los Angeles.

Florida to assist in dealing with supply chain issues

In November, the backlog prompted Gov. DeSantis to offer Florida as an alternative point for container ships to unload, given that at least 5 of the states 18 commercial ports are big enough to deal with the ships that were stuck off the California coast.

Whether his offer made any difference or whether manufacturers will alter their plans for shipping remains to be seen. Meanwhile, many consumers are finding shelves empty and in some cases, the prices of goods escalating to reflect the short supply.

Manufacturers are also suffering. The semiconductor shortage is expected to cost global manufacturers 4% of total sales for 2021 or around $60 billion. The automotive manufacturing industry has suffered particularly badly.

If Florida can build its semiconductor manufacturing industry, it may offer real benefit in the US longer term in preventing future shortages.

Have you experienced shortages in stores first hand? Would you buy American manufactured goods if they were available to you? Let me know in the comments section below.

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