U.S. Government Role in Foreign Trade -- What is the Best Approach. A Case Study of the U.S. Semiconductor Industry

摘要

This thesis examines the current state of the U.S. semiconductor industry in light of its alleged decline relative to foreign producers, specifically Japan, in the hope that an appropriate federal policy might be identified, based on current market conditions. Justification for federal intervention into private sector industry and the appropriate federal intervention methods are included, leading to a discussion of the national security benefits derived from a strong domestic semiconductor industry. Various micro Federal Government intervention methods are analyzed, including a 'hands off' policy, tariffs, anti-dumping measures, strategic stockpiling, Department of Defense (DoD) production, a 'Buy American' policy, subsidized domestic production, and industry consortia. The goal is to determine how effective they will be in bolstering the U.S. semiconductor industry. However, the problems in the semiconductor industry are seen more as macro problems affecting the economy as a whole. Thus, the recommended intervention policies focus more on macro solutions, including changes to the tax structure to encourage savings and discourage debt to reduce the cost of capital in the United States. These solutions will tend to stimulate the economy as a whole, rather than stimulate the semiconductor industry by itself.