In this digital age, chips are undoubtedly the core driving force for scientific and technological progress. The global chip industry pattern is undergoing profound changes. The U.S. chip industry, which once flourished, is now facing severe challenges from Asia. In order to revive its strength, the U.S. government has spent a lot of money and subsidized local chip companies, triggering a global "chip arms race". In this competition, the European Union, China and other regions have also shown their "heavy weapons", who can finally win the commanding heights of the chip industry, will determine the direction of the future science and technology map.
U.S. Chip Industry Policy:
In the face of the rise of Asia's chip industry, the U.S. government realized that it must take decisive action or be completely marginalized. In 2022, they passed the landmark CHIPS and Science Act, which allocated a whopping $52.7 billion to support the development of the local chip industry. The funds will be gradually put in place over the next five years to subsidize chip manufacturers to build factories, purchase equipment, and train chip talents.
At the specific implementation level, the U.S. government has provided billions of dollars in factory construction subsidies to leading chip companies such as Intel. Intel received $19.5 billion in subsidies and loans, which is seen as the largest chip subsidy by the U.S. government for a single company. In addition to Intel, other companies such as BAE Systems have also received subsidies.
The United States has also joined forces with its allies to contain China's chip industry. They have restricted exports of advanced chips and manufacturing equipment to China in an attempt to cut off China's access to key technologies. This series of measures reflects the US government's determination to revitalize the local chip industry and reduce its dependence on Asian supply chains.
EU Chips Act:
Seeing the large investment of the United States in the chip industry, the EU also realized that it was lagging behind in this field. In order to catch up, the European Union introduced the "Chips Act" at the end of 2022, which plans to mobilize 43 billion euros of public and private investment in the next few years to increase Europe's share of the global chip market.
Germany and France played the role of facilitators in this process. Both governments have pledged to provide large state subsidies to entice chipmakers to build factories in their home countries. On the road to the revival of the chip industry, the EU is also facing many practical challenges, such as talent shortages, overcapacity and other problems to be solved.
China's response:
In the face of the importance of the United States and Europe in the chip industry, the Chinese government is also aware of the need to accelerate the development of the local chip industry. On the one hand, China is vigorously supporting domestic equipment and material enterprises to promote the localization process of the chip industry chain. On the other hand, China is also actively absorbing foreign chip technology talents from the United States in an attempt to de-Americanize the industrial chain.
China has also given full play to the advantages of state-owned enterprises and private enterprises, increased investment in the chip industry, and focused on cultivating and introducing high-end chip talents. The goal of these measures is to give China a place in the global chip landscape in the future and avoid being completely marginalized.
Global Landscape:
Looking at the current global chip industry pattern, it is not difficult to find that Asia is still dominant. Asian companies such as TSMC and Samsung are leading the way in the manufacturing of advanced process chips. They have the vast majority of the production capacity to supply chips to the global tech giants.
This landscape is changing. The United States, the European Union, Japan, South Korea and other regions are trying to pull the chip industry chain back from Asia through policy subsidies. They hope to attract TSMC, Samsung and other companies to build factories in China through fiscal and tax incentives, so as to improve their voice in the global chip supply chain.
In this game, Chinese mainland will undoubtedly face the risk of being further marginalized. China must accelerate the pace of independence and control, achieve breakthroughs in key areas, and avoid being controlled by others in the "heart" of modern industry.