Underscoring the “con” in semiconductors

Well that didn’t take long.

Just nine days ago I wrote about how Washington was picking up the check for the semiconductor industry’s aggressive stock buyback programs, distributing billions in subsidies to an industry that could have funded itself if it hadn’t chosen to shower its shareholders with cash. And despite the passage of the wittily named CHIPS Act, which was supposed to encourage real investment in research and production, they’re turning the taps on the cash shower on again. The Financial Times reports:

On the same day that Congress passed the law, Intel, which is expected to be the biggest beneficiary of government grants, sliced $4bn from its capital spending plans for the rest of this year, although it said that it was still committed to a “strong and growing dividend” for its shareholders.

Meanwhile, Micron, which celebrated President Joe Biden’s signing of the legislation last week with the announcement that it planned to invest $40bn in the US by the end of the decade, was forced just a day later to say it would cut its capital spending “meaningfully” next year because of the downturn.

OK, business is slowing. But investment—in real things, not financial assets—is supposed to be governed by the long view. Clearly it isn’t. Once again, American capitalism proves that shareholder value is the most sacred value of all.

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