The chip is another battleground in the technology war between the US and China.

Over the years, the US-China technological arms race has encompassed everything from smartphones and mobile devices to social networking and artificial intelligence. But a new battlefield is emerging: the chip, an essential part of smartphones, computers, cars, household appliances and many other electronic products.

On August 9, President Joe Biden signed new legislation to boost the US semiconductor industry to address the chronic shortage of computer chips and reduce manufacturing’s reliance on electronic devices. Other countries like China. The new law, called the CHIPS and SCIENCE Act, will boost domestic semiconductor manufacturing and research and development. The plan provides $53 billion in additional funding to the US National Science Foundation (NSF), the US Department of Commerce and the US National Institute of Standards and Technology (NIST).

China has long been recognized as a major power in technology production. However, according to a current analysis by the Center for Strategic and International Studies, the nation of billions is also quickly establishing itself in the semiconductor market, where it is a global leader in the areas of assembly, packaging and manufacturing. Fourth (in the US) in wafer production – an important factor in chip production.

In recent years, China has focused on domestic semiconductor manufacturing capacity, which has allowed it to start reaping the rewards. In 2020, China’s semiconductor sales grew more than 30% from the same period in 2019, reaching nearly 40 billion, according to data from the Semiconductor Industry Association (SIA).

America has “warmed up”.

The US is currently dependent on China for semiconductor and technology products. American companies like Apple, Google, Microsoft all have partners who are setting up factories here.

US Treasury Secretary Janet Yellen has repeatedly lauded the importance of “building friendships” with other countries. In it, he emphasized shifting supply chains to US allies such as South Korea and Japan and further limiting the tech industry’s dependence on China.

Not only America, but also Europe is spending tens of billions of dollars to promote the semiconductor industry. On the other hand, China is still taking strong steps to further develop its semiconductor industry under the five-year plan announced by Beijing last year.

“There is a growing recognition that technology determines who wins in the global economy,” said Kenton Thibout of the Atlantic Council’s Digital Forensic Research Laboratory in Washington. CNN business.

But Thibaut says autonomy isn’t easy for Chinese semiconductors. “Total autonomy in chip manufacturing is easier said than done because it requires a lot of technology and know-how.” Speak.

America increases production

There is a shift from China to America. The world’s largest chip processing company in Taiwan plans to invest 12 billion yuan. Construction of a silicon wafer factory in Texas.

SK Group and Korean company Samsung have already begun to increase their presence in the US technology manufacturing sector and plan to build tens of billions of dollars in facilities. Domestic semiconductor companies like Intel are doing the same.

The Chips and Science Act will encourage more companies to bring factories to the US, experts say. “Building a factory is a costly and time-consuming process, so companies only move when money and good policies encourage it,” commented Zachary Collier, an assistant professor at Radford University.

As announced by President Biden, the $53 billion CHIPS and SCIENCE Act would give companies investing in semiconductor manufacturing a 25% tax break.

According to Collier’s calculations, the USA currently accounts for around a quarter of semiconductor demand, but the companies there only account for 12 percent. Previously, TSMC’s 2022 financial report for the second quarter showed that North America now accounts for 65 percent of sales, followed by China at 10 percent and Japan at 5 percent.

“Thanks to good politics, companies come to America. But changing China overnight may not be easy,” Collier said.

According to Thibaut, China currently has a major advantage in terms of infrastructure and the delivery of products to any country that needs them. “The United States and countries with similar goals must develop a long-term strategy. Not only do they compete with China, they actively provide real solutions to real needs,” said Thibaut.

Additionally, while countries can seek to establish domestic manufacturing facilities, experts say they cannot isolate themselves from global supply chains, particularly in complex areas like semiconductors. “It’s really a big network. No matter how localized it is, it is inevitable that it will be interdependent. It will still be a question of globalization one way or another,” Collier added.

Bao Lam (Consequences CNN)