The U.S. used to be a leader in this industry but it is struggling to compete with other countries due to monumental shifts in the business models in the semiconductor industry. Currently, companies from Taiwan, as well as South Korea, dominate this industry. Taiwan’s TSMC and South Korea’s Samsung Electronics control more than 70% of the market.
However, the U.S. is not willing to abandon this industry as semiconductors play an important role in the modern world. Problems created by a global shortage of semiconductors and geopolitical tensions with China underlined the importance of this issue. The U.S. earmarked billions of dollars to boost this industry and the country is also looking at alliances with other countries.
The semiconductor industry and a new administration
It will take time as well as effort to boost the local semiconductor industry. However, the U.S. is not necessarily falling behind in this industry as a whole. For instance, some of its firms are integral to the supply chain but in one area, the U.S. is struggling to compete with other countries. This area is manufacturing.
President Joe Biden is trying to strengthen the country’s position when it comes to manufacturing. The new administration also wants to secure supply chains. Joe Biden is working hard to support the country’s semiconductor industry. He signed an executive order which involves a review of the semiconductor supply chain. This way it will be possible to identify risks.
As part of a $2 trillion economic stimulus package, the country allocated $50 billion for semiconductor manufacturing and research. The U.S. is willing to take other measures as well. A bill known as the CHIPS for America is working its way through the legislative process. The CHIPS for America aims to provide incentives to enable advanced research and development and secure the supply chain.
It won’t be easy to compete with other countries, and one of the best solutions is to find partners. The U.S. and Japan will collaborate on supply chains for critical components like semiconductors. They will aim for a system where production is not concentrated on specific regions like Taiwan.
Private companies such as Intel are also willing to invest billions of dollars in this industry. The company plans to spend $20 billion to build two new chip factories and it will act as a foundry. Thanks to Intel’s decision companies will be able to use chips produced in the U.S.
- Trading Instrument