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Washington shores-up friends in the semiconductor industry

Research output: Contribution to specialist publicationEditorial

Robyn Klingler-Vidra, Yu Ching KUO

King's Authors

Abstract

In an effort to boost national competitiveness, the United States passed the ‘CHIPS and Science Act’ in August 2022 to enhance domestic chipmaking capacity through major investment in regional centres and support for talent development. Washington’s efforts also include the Chip 4 alliance — an arrangement through which the US government aims to diversify supply chains among Japan, South Korea and Taiwan.

The not-so-subtle aim is to frustrate the ability of Chinese producers to upgrade their capacity. That will help US firms maintain an advantage over Chinese firms like Semiconductor Manufacturing International Corporation (SMIC), which recently reported the development of a 7nm chip, among other new capabilities. The Taiwan Semiconductor Manufacturing Company (TSMC) is preparing to mass produce 3nm chips, while South Korea’s Samsung has just begun 3nm production.

Much of the coverage of friendshoring has focussed on manufacturing and design capabilities, the market share of chip firms and political posturing. But friendshoring and the US Chip 4 policy are ultimately about the people, or ‘friends’, behind these technological innovations. Japan, South Korea, and Taiwan have chipmaking ‘godfathers’ — people acclaimed for their crucial roles in developing semiconductor capacity. Yet several of these ‘godfathers’ have proven to be ‘frenemies’ to their own companies after being poached by competitors — including Chinese market entrants.

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