Towards Global Leadership: US and China Fight for Semiconductor Industry

Joe Biden China

The trade war between China and the United States is not going to calm down. The warring parties did not bury the hatchet even when the coronavirus pandemic is raging on the planet. America dreams to become a leader in IT and technology; and in order to achieve this goal, it professes both the power option and luring the largest technology companies.

Realizing the importance of components such as processors; the United States wants to turn its country into a forge for the production of SoCs. To achieve this, TSMC will build its factory in Arizona and is planning to launch it in 2024. But according to Reuters, the number of Taiwanese chipmaker factories in the United States may increase to six. According to the sources, it was the American side that insisted that TSMC take on the construction of additional enterprises in the state of Arizona. And all of them can launch in three years.

US wants to become a semiconductor superpower

We do not know what the design capacity of all factories will be and what lithographic technologies they will use in their production. Interestingly, at the preliminary stage of discussing the feasibility of locating chip production in the United States, TSMC representatives stated that this would entail substantial costs for the company, exceeding those that it incurs in Taiwan. They saw one of the ways out in the provision of government subsidies. If the rumors about the construction of six factories are true, then the United States has found a tool to put pressure on the chip maker, or it has been decided to appease with some preferences and benefits.

It is imperative for America to turn its country into a global chipmaking site. It pays a lot of attention to this issue and confirms this by the fact that meetings between TSMC representatives and officials of the US Department of Commerce are held daily. Trade Minister Gina Raimondo told about this in an interview. According to her, up to 30% of the Taiwanese chipmaker’s production should be moved to the United States. At the same time, it is presented as a fight against the shortage of processors, primarily in the automotive industry.

It is worth noting that the official speaks first of all about advanced lithographic technologies. And this is provided that such norms are not so widespread in the production of chips in the automotive industry. Namely, in this industry, the most acute issue is the lack of processors from American companies. So, due to a shortage of semiconductor products; cases of downtime of American automakers have become more frequent.

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Cold war or the threat of another split

All this once again underlines the desire of the United States to become one of the world leaders in the production of semiconductor products. And, above all, we are talking about consumer electronics and the desire to “crush” the largest manufacturers. It needs to grab a big piece of the “pie” in the production of advanced processors. And this is a matter of economic and national security for it.

In its report, the Pentagon said that “Taiwan, South Korea and China represent the dependency triad for the entire US digital economy”. Moreover, they see the greatest threat not so much in mainland China as in Taiwan; on which the most important technology companies directly depend. But everything is complicated by the fact that China considers it to be its territory; and is striving by all means to regain its influence here.

There are dozens of chip factories in the United States now; but only Intel is capable of producing chips at 10 nm or less. Similar chips are also produced by TSMC and Samsung, but the Chinese SMIC is not a competitor to them, because it only mastered the 14 nm process technology last year. With the participation of the White House last month, a meeting with the largest companies was held, which was attended and represented by Samsung. At it, American officials actively tried to convince the South Korean giant of the need to expand chip production in the United States.

But now China is seriously investing in the creation of its own semiconductor industry, and is also actively poaching specialists. In this situation, we will see with you a serious confrontation between the two largest world powers; where each of them wants to win in one of the most important industries.

Source/VIA :
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