Where it matters most, President Joe Biden’s industrial policies regarding technology supremacy are failing.

Last August, Biden signed the CHIPS and Science Act into law. Biden said the legislation would enable the United States to "win the future." Indeed, semiconductors are the oil and more of this century. Without advanced semiconductors, there will be no second industrial revolution centered on artificial intelligence . AI offers the promise of doubling the nation's economic growth rate.

All of the promises of AI are dependent on the most advanced semiconductor technology, design, and fabrication. And while the U.S. is preeminent in designing the most advanced semiconductors, it lags woefully in the fabrication area. In fact, the U.S. is completely dependent on semiconductor fabrication facilities in Taiwan for the most advanced chips. Without companies located in Taiwan, a country China covets, the U.S. preeminent position in AI would collapse. Unfortunately, Biden’s CHIPS Act promises about technology supremacy were hot political air.

Taiwan Semiconductor will not begin to fabricate advanced semiconductors at its new Arizona facility until the end of 2024, a lifetime in the semiconductor space. Construction of advanced semiconductor facilities is being delayed because semiconductor companies resist the conditions imposed by the Biden administration on the release of funds from the CHIPS Act. The administration requires that the semiconductor companies offer childcare benefits to employees and that the companies pay wages equivalent to what government employees would earn. Morris Chang, the founder of Taiwan Semiconductor, has already stated that the U.S. will never be a low-cost producer of the most advanced semiconductors. It is too difficult to build in the U.S., and U.S. labor is not cost-competitive.

As the U.S. struggles to build advanced semiconductor facilities, Taiwan Semiconductor and Samsung of South Korea are engaged in a multi-billion dollar arms race for global semiconductor supremacy regarding the most advanced semiconductors. Taiwan Semiconductor invests about $35 billion annually in its semiconductor facilities. Samsung is investing $230 billion to build one new advanced semiconductor manufacturing facility.

The $53 billion appropriated by the CHIPS Act is chump change compared to the investments of Taiwan Semiconductor and Samsung. Until the U.S. dramatically lowers the cost of capital for the semiconductor industry, dramatically streamlines the permitting process, and dramatically improves labor productivity, the U.S. will never be able to compete against Taiwan or South Korea in the advanced fabrication of semiconductors.