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Chips Dip

image credit: IEEE Spectrum
John Benson's picture
Senior Consultant, Microgrid Labs

PROFESSIONAL EXPERIENCE: Microgrid Labs, Inc. Advisor: 2014 to Present Developed product plans, conceptual and preliminary designs for projects, performed industry surveys and developed...

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  • Jun 14, 2022

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Everyone probably has heard about the chip-crisis that the auto industry (and others) has been experiencing. I have been looking for a really good explanation of this that I could share with my readers. I finally found one.

You probably thought that the Electric Utility Industry was immune from this. Ha! Read Section 2 of this post.

Jim Stack's picture
Jim Stack on Jun 15, 2022

INTEL is the worlds largest chip maker and is located in Chandler, Arizona.  I bet their world leading chips are sent all over the world from Arizona. They are also building more FABs right now in Chandler and Ohio. Maybe many chips won't have to travel as far soon. 

John Benson's picture
John Benson on Jun 15, 2022

Hi Jim, Thanks for the comment.

If you will note from the second paragraph in section 3.3 of this post, "...China, 
meanwhile, remains a net importer of semiconductors, largely from the United States...
" Maybe Arizona will be sending some of your state-of-the-art chips to China. At least it will help the balance of trade deficit.


Audra Drazga's picture
Audra Drazga on Jun 17, 2022

Jim, isn't some of the issue the elements that go into making chips too?  Curious if this has impacted Intel at all.  And I am all for more being produced and made in America! 

Audra Drazga's picture
Audra Drazga on Jun 17, 2022

John, I have to say, when I saw the title of this, I must have been hungry because I immediately thought of chips and dip :).  While I do not think the crisis has hit utilities hard yet - as there does not seem to be a lot of talk about it anyway - I believe it is probably coming.  I have already heard from some of our solution providers, who rely on chips, that they are starting to face some issues with supply chains.  Curious where we will see the most significant impact?  Since there is a lot of investment in infrastructure projects - what do you think will be delayed due to supply chain issues?

John Benson's picture
John Benson on Jun 20, 2022

Hi Audra:

Although the most of the fabs shown in the post have not started construction yet there are a few that are actually being built. But it will take one to two years to build and equip each fab, another year or so to ramp production. Also, we are shooting at a moving target - the percentage of all products in all sectors using advanced ICs is increasing over time, and some sectors (like EVs, renewable generation and storage) are experiencing explosive growth. Unless there is a major recession, I would guess it will take five to ten years to resolve the shortage of advanced ICs.


John Benson's picture
John Benson on Jul 27, 2022

I came across an excellent article from Forbes this morning on the impending federal CHIPS Plus bill. I pasted the key facts below, and a link to the article below that.

The Senate voted 64-32 across party lines to break the legislative filibuster and limit debate on the “CHIPS plus” bill, allowing for a final vote later this week, with Senate Majority Leader Chuck Schumer (D-N.Y.) reportedly saying he hopes senators “can remain on track to finish this legislation ASAP.”

The legislation includes $52.7 billion for domestic chip manufacturing and research subsidies, along with $2 billion earmarked for less advanced legacy chips, which are crucial to the military and automotive industry, according to a bill summary.

The subsidies would largely go toward U.S. companies to help fund the construction of new semiconductor fabrication plants, where the chips are created.

It also features a 25% tax credit for U.S. semiconductor manufacturing investments, and $1.5 billion set aside for developing technology to help U.S. firms wean off their dependence on foreign telecommunications equipment.

The bill is a slimmed-down version of legislation that Republicans threatened to block earlier this month if Democrats continued to pursue unrelated efforts to pass a package to fund their climate, tax and prescription drug priorities.


Audra Drazga's picture
Audra Drazga on Jul 28, 2022

John, Thanks for sharing this.  I have actually been following this bill as well.  Audra

John Benson's picture
John Benson on Aug 9, 2022

See the article from The Washington Post linked below:

Biden signs Chips Act, kicking off huge federal industrial initiative


Audra Drazga's picture
Audra Drazga on Aug 11, 2022

John - curious to follow this and see how it impacts the utility industry. 

John Benson's picture
Thank John for the Post!
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