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CHIPS and Science Act Relieves Salsa Surplus

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“I don’t know why everybody keeps talking about Taiwan,” said Jaquelin Schwarz. “I think Mexico has the best chips.
Photo by Julia Wong

Months after the passage of the CHIPS and Science Act, the global salsa surplus is beginning to show signs of recovery. The years-long crisis apparently began as a consequence of the global semiconductor shortage, but the question of how it caused significant salsa overproduction has “spiced up” economic debate ever since.

“It all began when news of the ‘chip shortage’ was misinterpreted,” said Johnald Kash, UCSD economics professor. “Billionaire and famed nacho magnate Jaquelin Schwarz attempted to capitalize on the news by buying and shutting down tortilla chip factories across the globe to control the supply. Meanwhile, the semiconductor shortage hindered the creation of new factories to fill the hole in the market. This spicy medley of economic pressures were all the ingredients necessary to mix up a salsa surplus.”

In an effort to resolve the salsa catastrophe, producers attempted to offload excess stock by marketing salsa to a broader set of purposes. Instead of selling salsa to eat, Halen sold salsa verde to salons as a facial scrub. Aquatica replaced its Lazy River with a Río Picante. Hospitals began substituting saline with less-expensive salsa IVs.

The extra business proved enough to keep the salsa market afloat, but salsa continued a trend of devaluation since Schwarz’s acquisition. “At one point, salsa was worse than worthless,” said Edward Vann, CEO of Halen International, based in Panama. “Storing it was getting pricey, so we had to start paying folks to take it off our hands. Even then, people wouldn’t take it. Who wants a thirty-gallon barrel of pico de gallo without any chips to eat it with?”

As the producer of over 50% of all salsa purchased globally, the salsa surplus hit Halen hardest. “At times I found myself asking: ‘Where have all the good times gone?’” Vann said. “But then the CHIPS Act passed, and it was like a salsa-ruption. Now, everybody wants some.”

Not only did the CHIPS and Science Act authorize funding for US semiconductor fabs, it also funded new tortilla chip factories and research into new uses for salsa. New petrochemical engineering processes were developed to recycle corn-based salsas into a biofuel gasoline additive called ethanalsa. In many gas stations across the country, gasoline is mixed with up to 10 percent ethanalsa, simultaneously alleviating the salsa surplus and lowering gas prices. The long term effects of spicy salsa on exhaust fumes are yet to be determined.

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