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The USA and China continue redistribution of the global semiconductor market

The microelectronic arms race.

   
December 24, 2022, 23:13
Business & Energy
Photo: newspile.ru

Photo: newspile.ru

BEIJING (Realist English). This week, the TSMC management announced that investments in the construction of semiconductor plants in the United States will be tripled and reach $40 billion. The company will produce about three times more chips than it has planned before. If and when this happens, the United States will have become the world’s largest center for their production. Such prospects have become possible thanks to unprecedented state support and fierce protectionism (“The Inflation Reduction Act of 2022″ and ” the CHIPS and Science Act of 2022″).

While in Russia they are reflecting on the sacred competition and are afraid to offend foreign partners by accidentally appropriating their intellectual property – in the States they prescribe sales chains from A to Z and subsidize demand with the most rigid Soviet methods! The grooved sole of the American boot has not just stepped on the fragile fingers of market relations, it enjoys their crunch.

Another interesting point: it is expected that the annual  National Defense Authorization Act for Fiscal Year 2023 will include a section prohibiting the US government from using chips from SMIC and two other Chinese manufacturers of memory chips.

Most of the world’s technological chains in all industries where microelectronics is present are tied to the 28 nm topology. At the same time, in the USA itself, the volume of production of such chips is still insufficient. Therefore, American companies are fiercely resisting the restrictions of the Chamber of Commerce on imports from China. In addition, at stake is the issue of the cost of American products, which will obviously be greater than imported from China.

In the Middle Kingdom itself, meanwhile, they are not asleep and are trying to use the historical “finest hour”. The light wedge has not converged in the American market. Today, China has abundance of orders, including from Russia, and openly hostile US measures completely untie the hands of SMIC and other manufacturers. Besides, trading for national currencies takes all transactions out of American control.

China has mastered the mass production of 14-nanometer chips without the use of foreign technologies, the Tom’s Hardware writes. Semiconductor Manufacturing International Co. (SMIC), China’s largest contract chip manufacturer, was able to achieve this. However, American analysts regret to note that Chinese competitors are not fixated on the pursuit of thin topologies, but focused on expanding the scale of production in the traditional “medium” niche.

“SMIC is much more willing to increase their capacity than other low–level factories, taking advantage of the shortage in the market,” according to an analyst at Bernstein Research.

ChinaChina’s EconomyTechnologyUnited StatesUS EconomyUS-China Relations
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