Edoardo Campanella and John Haigh
Although semiconductor chips are ubiquitous nowadays, their production is concentrated in just a few countries, and this has left the US economy and military highly vulnerable at a time of rising geopolitical tensions. While the United States commands a leading position in designing and providing the software for the high-end chips used in AI technologies, production of the chips themselves occurs elsewhere. To head off the risk of catastrophic supply disruptions, the US needs a coherent strategy that embraces all nodes of the semiconductor industry.
That is why the CHIPS and Science Act, signed by President Joe Biden in 2022, provided funding to reshore manufacturing capacity for high-end chips. According to the Semiconductor Industry Association, the impact has been significant: currently planned investments should give the US control of almost 30 percent of global wafer fabrication capacity for chips below ten nanometres by 2032. Only Taiwan and South Korea currently have foundries to produce such chips. China, by contrast, will control only 2 percent of manufacturing capacity, while Europe and Japan’s share will rise to about 12 percent.
But US President Donald Trump is now trying to roll back this strategy, describing the CHIPS Act—one of his predecessor’s signature achievements—as a waste of money. His administration is instead seeking to tighten the export restrictions that Biden introduced to frustrate China’s AI ambitions.
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