The European Union and The United States have poured money into chips to win back share from Asia

The American Compete Act of 2022 has been passed by the House of Representatives, automotive News reported.The bill is being watched by a number of semiconductor and chip manufacturers in the US, including Intel.The centerpiece of the bill is $52 billion in funding for the semiconductor industry.In addition, the bill calls for $45 billion over the next six years to alleviate the crisis of supply chain shortages.Just days after the US announcement, the European Commission approved the Eurochip Bill, which aims to strengthen the EU’s semiconductor ecosystem, ensure chip supply chain resilience and reduce international dependence.Semiconductor chips, as the core of digital technology, are vital to EU industry and society, and indispensable for driving the eu’s green and digital transformation, the EU said.Threats to face
For the US and EU, the semiconductor market share has been at a low level in recent years.The Detroit Times reports that the U.S. market share in global semiconductor manufacturing has steadily declined from 37 percent in 1990 to about 12 percent today.The European semiconductor industry, which accounts for about 10% of the global semiconductor market, has been slowing down in recent years.Commerce Secretary Gina Raimondo said the most “pressing need” in the new bill is $52 billion for domestic chip production, as the global chip shortage has a huge impact on the economy, including the auto industry.At the same time, she said: “We can’t wait any longer, we are too far behind.We are in such a precarious position only because we are over-reliant on Taiwan, China, to make the most advanced chips for us.”Forbes pointed out that the purpose of the bill is to make the SEMICONDUCTOR manufacturing industry in the United States regain market share and reduce its dependence on other countries and regions.But for now, the U.S. semiconductor supply chain is incomplete.Today, only the high-margin, low-pollution parts of the business — chip design, software development, branding — remain in the U.S.Semiconductor manufacturing, which requires intensive labor, has been largely moved to Southeast Asia.Most manufacturing is now concentrated in China, South Korea and Southeast Asia.Eighty percent of the world’s chips are made in Asia, according to data released by the Semiconductor Industry Association (SIA).Southeast Asia is an important test and packaging hub for technology companies, accounting for 27% of the global semiconductor test and packaging market.The European Union’s semiconductor industry target is for European producers to produce 20% of the world’s chips by 2030.”The CHIP act can improve the COMPETITIVENESS of the EU on a global scale.In the short term, it will improve the EU’s resilience to future crises by enabling it to anticipate and avoid supply chain disruptions;In the medium term, it will help the EU to become a leader in the strategic chip market.”Ursula von der Leyen, president of the European Commission, said Europe’s chipmakers would have “substantial investments”, with 12 billion euros in public and private funds, on top of 30 billion euros already earmarked from national coffers, bringing the total to 42 billion euros.Voices of doubt
Although both economies are confident about their chip bills, doubts are mounting.Mr Chang, TSMC’s founder, says that even if the EU and THE US were to “throw a lot of money” at local supply chains, they would not necessarily succeed.Forbes pointed out that the semiconductor supply chain crisis in the United States is not only due to insufficient production capacity, but also a series of problems such as the loss of workers and the lack of fine management. The allocation of 52 billion DOLLARS alone cannot solve all the problems.In addition, many industries in the United States have shifted manufacturing to other labor-intensive countries and regions to reduce costs.If the United States insists on building new chip plants at home, it does not mean that American manufacturing will become competitive.According to the Semiconductor Industry Association, the 10-year total cost of new plants in the United States is 25% to 50% higher than in Asia.In addition, according to industry estimates, if all countries in the world develop their own chip supply chain, it will lead to the fragmentation of the global semiconductor supply chain, and will lead to an increase of 35%-65% of the cost of semiconductor products, causing a certain impact on the global economy.Dutch lithography giant AsML expressed its opinion on the EU chip bill: “The EU’s chip industry spending is less than 50 billion euros, compared to the investment of China, the United States, Japan, South Korea and other countries, it is’ too stingy ‘, it is impossible to break through the high-end chip production process.”The EU, he argues, would be better off forming a chip industry alliance rather than trying to achieve rapid industrial development on its own.On the other hand, one of the main reasons for the current lack of core is the lack of wafer capacity, Forbes noted.However, the time span of wafer manufacturing expansion is long. A new wafer factory needs at least 1-2 years to build, which makes little contribution to the current core shortage problem and does not see a return in the short term.Shangguan by Shanghai Automotive News

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