Semiconductors, what it takes for the US industry to beat China. Report
According to a study conducted by the Semiconductor Industry Association (Sia) which groups the main companies in the semiconductor industry, up to $ 50 billion in federal incentives will be needed to keep chip production in the United States
The China-US war also (and above all) passes on chips.
The US semiconductor industry says up to $ 50 billion in federal incentives will be needed to stop the decade-long trend of overseas manufacturing.
Otherwise, US leadership would be at great risk in the industry.
Since China spends a lot to become a major semiconductor manufacturer, the United States must therefore be an attractive location for factories such as Taiwan, China, South Korea, Singapore, Israel and parts of Europe. This is what the Semiconductor Industry Associationin (Sia) claims in a report published last week.
According to Bloomberg , “The lobbying group, which represents companies like Intel and Qualcomm, is knocking on Washington at a time when it believes the US administration is more open to listening. The trade war between China and the United States and the disruptions in the supply chain caused by the pandemic have revealed the risks associated with the overseas production of these vital components ”.
Not only. The United States Congress is considering legislation that requires substantial investment in domestic semiconductor manufacturing and research.
WHO REPRESENTS IS
The Sia association accounts for 95% of the US semiconductor industry by revenue and nearly two-thirds of non-US chip companies.
WHAT THE REPORT REVEALS
The report, titled Government Incentives and US Competitiveness in Semiconductor Manufacturing, notes that strong federal incentives would reverse the decade-long trajectory of decline in US chip manufacturing. Such investments would also create up to 19 large semiconductor manufacturing facilities and 70,000 high-paying jobs in the United States over the next 10 years.
THE STAR AND STRIP MICROCHIP INDUSTRY
The $ 400 billion semiconductor industry is led by US companies, but many chip makers, such as Nvidia Corp. and Qualcomm, outsource manufacturing to factories mostly in Asia.
According to Sia, US-based chip makers sell nearly half of the world's semiconductors. But only 12% of their production capacity is in the country.
The report states that “manufacturing techniques, including chemical processes and complex manufacturing equipment, play a critical role in determining chip performance. The United States has to keep some of this domestic work so that it can maintain its knowledge base and ownership of skills ”.
FUNDAMENTAL FOR 5G AND AI DEVELOPMENT
Specifically, the study found that innovations like the 5G network, quantum computing, and artificial intelligence (AI) are semiconductor-enabled technologies. Therefore, countries at the forefront of developing components that support the advancement of those fields will be technology leaders.
WHERE IT IS CONVENIENT TO START PRODUCTION
However, it costs around 30% more to set up a plant in the United States in a decade than similar sites in Taiwan, South Korea and Singapore, according to the association. According to the report, China could cost up to 50% less.
THE PUSH OF BEIJING
According to the report, “only 6% of the new global development capacity will be located in the United States. On the contrary, China will add about 40% of the new capacity in the next decade and will become the largest semiconductor manufacturing site in the world ”.
Thus, as US production declines, Beijing is pouring about $ 100 billion into incentive programs. China will thus become the cheapest place in the world to manufacture electronic components.
WHAT THE STAR AND STRIP SEMICONDUCTOR INDUSTRY NEEDS
In the report, the association argued that new US facilities built with eventual federal support "would bring state-of-the-art manufacturing technology and sufficient capacity to meet the demand for semiconductors from US aerospace and defense industries."
In a decade, semiconductor factories cost up to $ 40 billion. According to the report, government incentives around the world reduce the cost to $ 13 billion.
TRUMP'S WAR ON CHINESE TECHNOLOGICAL COMPANIES
Meanwhile, the Trump administration is waging war on Chinese chip makers. After Huawei and ZTE, Washington has also targeted semiconductor companies, such as Taiwan Semiconductor Manufacturing Co (Tsmc) and Semiconductor Manufacturing International Corp ( Smic) .
As Marco Orioles told Start, "after targeting the Taiwanese Tsmc, which produces chipsets for Huawei, to prevent it from supplying chipsets to Hisilicon, the company that supplies components to Huawei, now the US government is thinking of striking the blow. by grace by including Semiconductor Manufacturing International Corp (Smic), the largest Chinese chip manufacturer, in the Entity List.
Shares of chipmaker Smic plummeted nearly 23% in Hong Kong on Monday, September 8 , losing $ 4 billion. One fifth of their value.
Reason? The press rumors that revealed the possibility of sanctions coming from the United States.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/semiconduttori-cosa-serve-allindustria-usa-per-battere-la-cina-report/ on Mon, 21 Sep 2020 06:07:55 +0000.