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Semiconductor Industry If it Abide By “China Plus One” Strategy?

The Taiwan based global semiconductor manufacturing firm TSMC, which is now equipped with the world’s largest foundry, is leading the industry. Chinese premier President Xi Jinping, who is considered to be one of the most powerful global leaders, has undertaken numerous efforts to reunify or invade the island country Taiwan. The danger of military takeover by China is increasing everyday. Now, on the other hand, the US is forming various strategies with its allies to defeat China in the global technology race and also to boost its growth in the chip industry. Since review film the time of the Trump administration Chinese giants like Huawei and ZTE were banned from providing services and solutions in the country. In fact Japan, which was once a preferred semiconductor destination is now trying hard to regain the growth like the 70s. Therefore, experts opine that Japan must increase their current strengths and must have amicable relationships with their equivalents overseas such as Taiwan and the US.

With the onset of COVID-19 pandemic in 2019, the global production of semiconductors slumped to a larger extent, which ultimately affected the international automobile and every chip-based sector. As per media reports, the worldwide sales of semiconductors towards the end of 2021 has reached $556 billion of which the US accounted for 46 percent. In fact, the global shares of top-notch semiconductor manufacturers in the US has degraded from 37 percent in 1990 to 12 percent until today. This is because the USA’s counterparts overseas have invested massively in semiconductor manufacturing coupled with billions of dollars of incentives. In an effort to revive its growth again, the US has finally unleashed the much-awaited CHIPS and Science Act in 2022 worth $52.7 billion.

What’s Leading the Semiconductor Geopolitical Scuffle
Semiconductors act as the brain of electronic devices and are playing an imperative role in shaping the digital economy. Now, the point is the upcoming cutting-edge semiconductors, which will be equipped with millions of transistors coupled with massive integrations are relying on the volume of investments. The chip manufacturing is now going through a lot of geopolitical scuffles, which is because of the fact that China now produces 25 percent of the semiconductors and is aiming to lead the global market. The remaining 75 percent of semiconductors are manufactured in East Asian countries such as Taiwan, South Korea, and Japan. Taiwan’s TSMC alone accounts for 90 percent of the advanced semiconductor manufacturing. Apart from Taiwan, one foundry is located in Nanjing, Shanghai, and in the US.

As per a previous report of the CircuitDigest, there were several heated discussions and speculations in the past couple of weeks regarding USA’s strenuous efforts to persuade Netherlands and Japan to join its league of no export of semiconductor technology to China. According to the experts, the US has been undertaking this strategy to boost its semiconductor industry and Japan and Netherlands will play an imperative role because they are the key providers of semiconductor manufacturing equipment. Although the US has the largest group of Integrated Device Manufacturers (IDM) for semiconductors, Netherland’s ASML Technology and Japan’s Advantest are the key players in this industry. ASML is the only company in the world that produces lithography machines that are utilized in making cutting-edge chipset. Therefore, if the country chooses to abide by Biden’s request, the matter will be a serious threat to China. Both India and the US have announced a strategic partnership on January 31 to boost the growth of semiconductors, space, defense, and modern technologies.

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