15 Feb 2024 -

Chip rush: Global scramble for semiconductor supremacy

The world is in a chip-building frenzy, driven by concerns about supply chain vulnerability and the race to dominate future technologies. The US, EU, China, and others are throwing billions at chipmakers to build factories within their borders, in a bid to reduce reliance and fuel innovation.

The US CHIPS Act offers $53 billion to lure chipmakers back, aiming to counter China’s technological rise. Europe and Japan have unveiled similar subsidy packages, while India seeks to establish its own chipmaking ecosystem.

This global chip rush is not just about competition with China, though. The pandemic exposed fragilities in chip supply chains, prompting countries to prioritize secure domestic production. While the US boasts high-profile projects like TSMC’s Arizona fab, delays due to workforce issues and funding negotiations highlight the challenges.

Meanwhile, chipmakers themselves are playing the field. TSMC, a global leader, is building fabs in the US, Germany, and Japan, while Samsung expands in both the US and South Korea. Micron, another major player, is investing in India and Japan alongside its US commitments.

“All countries are starting to increase their level of focus,” Micron’s Manish Bhatia told Foreign Policy, acknowledging the strategic importance of chips for national economies. This global chip scramble is set to reshape the industry’s landscape, with profound implications for technology development, supply chains, and geopolitical power dynamics.

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