新经济思想研究所-芯片价格下跌的原因：美国半导体行业的股票回购和补贴（英）-2021.9-27页_947kb

Summary of "Why the CHIPS Are Down: Stock Buybacks and Subsidies in the U.S. Semiconductor Industry"

Core Content

This working paper analyzes the U.S. semiconductor industry's decline in global manufacturing leadership in the context of corporate financial strategies, particularly the use of stock buybacks. It critiques the CHIPS for America Act, a bipartisan legislation aimed at boosting U.S. semiconductor manufacturing through public subsidies, by highlighting the paradox that the very companies lobbying for this act have historically used government support to fund stock buybacks rather than investing in technological innovation and productive capabilities.

Main Purpose

The paper argues that the U.S. semiconductor industry's underinvestment in manufacturing and R&D has been driven by the financialization of corporate strategies, where firms prioritize boosting stock prices through buybacks over long-term technological development. It suggests that Congress should consider regulating stock buybacks to ensure that public funds are used effectively to strengthen the industry.

Key Findings

• CHIPS for America Act: Introduced in 2020 and passed by the Senate in 2021 with $52 billion in subsidies, the act aims to restore U.S. leadership in semiconductor manufacturing. However, the paper questions whether this is a sufficient response given the industry's long-standing reliance on corporate financial strategies rather than government investment.

• Corporate Buybacks: SIA corporate members, including Intel, IBM, Qualcomm, Texas Instruments, and Broadcom, have historically spent $249 billion on buybacks from 2011-2020, equivalent to 71% of their profits. This is almost five times the amount of subsidies the act provides over the next decade.

• Apple, Microsoft, Cisco, and Google: These firms, members of the Semiconductors in America Coalition (SIAC), spent $633 billion on buybacks during the same period, 12 times the government subsidies. Their actions suggest a continued focus on financial returns over strategic manufacturing investment.

• Intel as a Case Study: Intel, the largest U.S. semiconductor company by revenue, has historically underinvested in technological innovation and overallocated profits to shareholders through buybacks and dividends. Despite its financial strength, it has lagged behind TSMC and Samsung in advanced chip manufacturing.

• Financialization and Organizational Learning: The paper highlights that financialization—a focus on short-term stock price manipulation—has undermined organizational learning, which is essential for technological innovation. It argues that strategic control within firms has shifted from technological engineering to financial engineering, especially since the 1980s, when stock-based compensation became a major incentive for executives.

• Stock-Based Pay and Executive Behavior: CEOs of major semiconductor firms, including Intel, have increasingly relied on stock-based pay to boost their personal wealth. This has led to a misalignment between corporate strategy and long-term innovation, as executives prioritize stock price manipulation over R&D and manufacturing investment.

• Regulatory Recommendations: The paper proposes that Congress should require firms lobbying for the CHIPS Act to pledge to stop stock buybacks for the next decade, as a way to ensure that public funds are used to support real innovation and manufacturing capacity. It also suggests rescinding SEC Rule 10b-18, which facilitates open-market repurchases and exacerbates income inequality.

Key Figures

• Total buybacks by SIA members (2011-2020): $249 billion, equivalent to 71% of their profits.
• Total buybacks by SIAC members (2011-2020): $633 billion, 12 times the subsidies under the CHIPS Act.
• Intel's buybacks (2011-2020): $196 billion, 92% of net income.
• Intel's R&D and P&E investments (2011-2020): $460 billion, 22% of revenues.
• Intel's CEO stock-based pay (1992-2020): Over 90% of total compensation for some CEOs, including Andrew Grove and Craig Barrett, was derived from stock options and awards.

Conclusion

The paper concludes that the U.S. semiconductor industry's decline is not due to a lack of government support, but rather to the financialization of corporate strategy. It calls for a reevaluation of the CHIPS for America Act and suggests that public funds should be directed toward investments in innovation and manufacturing rather than subsidizing firms that have historically prioritized stock price manipulation over long-term competitiveness.