Thursday, May 24, 2024 – The competition for dominance in the global semiconductor industry is intensifying, fueled by billions of dollars in investments from both the United States and China.
The US allocated USD 32.8 billion under its CHIPS Act to boost Semiconductor and Chip production, while China set aside a staggering USD 142 billion. China also aims to have the highest number of semiconductor facilities, of any country. 1
This race is driven in part by the disruptions to chip supply chains experienced during the pandemic, highlighting the strategic importance of these components for a wide range of industries.
The United States recently enacted the CHIPS Act, which allocates $32.8 billion in incentives for domestic chip production.
This initiative aims to create jobs, reduce reliance on Asian chipmakers, and bolster the Biden administration’s image ahead of the upcoming elections.
Beyond direct subsidies, the US strategy also includes export restrictions targeting China. These restrictions aim to limit China’s access to key technologies needed for advanced chip development.
This approach has already impacted major Chinese players, with Semiconductor Manufacturing International Corporation reporting its worst profit margins since the 2008 financial crisis.
Estimates suggest China is investing a staggering $142 billion in domestic chip production, with the goal of achieving self-sufficiency and countering US restrictions.
This massive effort includes building more semiconductor fabrication facilities (fabs) than any other nation.
The US-China rivalry is just one facet of a broader global trend. Europe, Japan, and India are also pouring billions into their domestic chip industries.
The European Union’s Chips Act commits over €43 billion ($46 billion) of public and private investments, while individual European nations like Germany, France, and the Netherlands have allocated additional billions.
Similarly, Japan and India have pledged significant government funds to boost domestic chip production.
- China’s Semiconductor: https://finance.yahoo.com/news/chinas-semiconductor-spending-tops-us-220755947.html?guccounter=1[↩]
