The US has set its sights on a bold and ambitious goal: to transform its position in the global semiconductor market. Currently absent in the production of advanced logic chips, the nation aims to capture a 20% market share by the end of the decade, as outlined by Secretary of State Gina Raimondo. This marks a dramatic shift in strategy, aiming to secure domestic control over critical components that power everything from smartphones to advanced military systems.
The plan goes beyond simply building new chip fabrication facilities, instead targeting the “entire silicon supply chain”. Raimondo emphasises that the US must develop capabilities across the board, from polysilicon production to final packaging, to achieve genuine independence in chip manufacturing. This comprehensive approach aims to avoid the single-point failures that continue to plague international supply chains.
The recent chip shortage crisis highlighted the fragility and interdependence of global semiconductor supply chains. Legacy chips, once taken for granted, caused devastating production freezes in the automotive industry, underscoring the economic risks of supply disruptions. The US government is determined to bolster domestic resilience to future shocks, ensuring that critical industries are not held hostage to semiconductor shortages.
However, revitalising domestic chip production will require strategic investments and a targeted approach. “The point of this programme isn’t to sprinkle a bunch of money out to as many companies as possible,” Raimondo stressed. This indicates a focus on high-impact projects with the greatest potential to transform the US semiconductor landscape.
The timing for these initiatives seems well-aligned. Global demand for semiconductors continues to surge, with worldwide sales figures for January 2024 increasing by 15.2% compared to the previous year. Projections from the Semiconductor Industry Association (SIA) indicate that the market will continue expanding at a double-digit growth rate in 2024.
The US’s push for chip self-sufficiency carries significant geopolitical implications in an era of increasing tensions and technological competition. Rebuilding a strong domestic industry serves not only to secure supply lines but can also reassert US dominance in the strategic semiconductor field. If successful, this ambitious initiative could have far-reaching economic and security repercussions, changing the balance of the global semiconductor industry going forward.
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