Will U.S Become The Top Country For Microchips?

Putri Alivia Rifaih . January 04, 2023

Picture: MindMatters.ai

Techspace - The globe is currently experiencing a conflict called the chip war, which is similar to the conflict between Ukraine and Russia. The United States and China engage in fierce competition over the chip. 

The electrical and defense industries rely heavily on semiconductors. Semiconductors are used in consumer electronics like mobile phones, computers, gaming consoles, microwaves, and autos, as well as electronic equipment and devices including diodes, transistors, and integrated circuits. It is now referred to as "the new oil" and "a horse shoe nail for the twenty-first century."

In addition, semiconductors are the foundation of the industrial sectors. The biggest producers of semiconductors worldwide include the United States, Asian nations including Taiwan, China, South Korea, and Japan. 87% of the world market is dominated by businesses from Taiwan, China, and South Korea.

The semiconductor Industry Association predicted that in 2021, worldwide semiconductor sales will increase by 20%. The scarcity of sophisticated elements diminished quickly as consumer electronics demand fell. As a result, the industry is now experiencing high stock.

The semiconductor manufacturing powerhouse, Intel assembled officials in September at a piece of land close to Columbus, Ohio, and made a commitment to invest at least $20 billion in two new semiconductor facilities.

A month later, Micron Technology celebrated the opening of a new production facility close to Syracuse, New York, where the chip maker anticipated investing $20 billion by the end of the decade and potentially even five times that amount in the future.

A party was also held in Phoenix in December by Taiwan Semiconductor Manufacturing Company, which announced intentions to increase its investment to $40 billion and construct a second new facility to produce cutting-edge chips.

The commitments are a part of a massive expansion of American chip-making ambitions during the past 18 months, whose size has been compared to expenditures made in the space race during the Cold War.

The surge has consequences for geopolitics and global technical leadership, with the United States seeking to stop China from overtaking other chip-producing nations as a leading supplier of cutting-edge computer hardware like smartphones and virtual reality goggles.

Since the spring of 2020, more than 35 corporations throughout the country have committed about $200 billion for chip manufacturing projects, according to a trade association called the Semiconductor Industry Association. 

The funds will be used in 16 states, including Texas, Arizona, and New York, to build 23 new chip manufacturers, expand nine facilities, and attract investments from businesses that provide the sector with supplies and equipment.

According to industry experts and the Semiconductor Industry Association, Taiwan produces around 22% of the world's total chips and more than 90% of the most sophisticated processors.

Even yet, it's unclear that the ramp-up will terminate the United States' reliance on Taiwan for the most cutting-edge processors. These chips are the most potent since they fit the most transistors onto each slice of silicon, and they are frequently cited as evidence of a country's technical advancement.

Confusion arises around whether other chip companies will bring more sophisticated technologies for cutting-edge chips to their new facilities. Samsung Electronics has not yet revealed the production technologies it would use in the $17 billion new facility it plans to build in Texas. 

Although Intel has stated that its American facilities will produce three-nanometer circuits by 2024 and even more advanced goods shortly after that, they are now producing chips at a size of around seven nanometers.

The investment surge is also expected to lessen, although not completely eliminate, America's reliance on Asia for other kinds of semiconductors. Only 4% of the memory chips used in PCs, smartphones, and other consumer electronics are produced in domestic factories; Micron's proposed expenditures may eventually increase that number.

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