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US, EU Team Up to Challenge China in Chip Race with $81 Billion Investment

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The U.S. and the European Union (EU) have sponsored heavily around $81 billion for developing next-generation semiconductors, mounting strong competition in the industry. 

The report says governments around the world have consigned an overall $380 billion with US and EU benefaction and a combined $81 billion to raising production by companies such as Intel and TSMC. Talking about the dedicated investment of the US in boosting domestic semiconductor production, it appears to be $52.7 billion over the next five years. 

Under the Semiconductor Support Act, the U.S. plans to offer a total of $52.7 billion, including $39 billion in production subsidies and $13.2 billion in research and development (R&D) support. Apart from this, the US has confirmed subsidies of $8.5 billion for Intel. $6.6 billion for TSMC, $6.4 billion for Samsung Electronics, and $6.1 billion for Micron. 

On the other hand, the EU decided to invest about $46.3 billion in powering semiconductor manufacturing authorities within the region. Based on this investment, the EU estimates that over $108 billion will be invested in both the public and private sectors. 

In short, the US and EU are building strong competition in the industry for next-generation semiconductors. The US is playing a strategic game by partnering with the EU, South Korea, Taiwan, and Japan, especially against China. The EU is offering subsidies for Intel and TSMC factories in Germany; however, the final license is pending. 

China is estimated to be financing the cost at more than $142 billion, which includes a new $27 billion chip fund. Japan allocated $25.3 billion to support domestic production, which includes subsidies for TSMC and Rapidus factories, and the aim behind this is to triple chip production sales by 2030. 

India confirmed a $10 billion subsidy plan for its very first domestic chip factory, which has seen growth via an indirect support program, but critics point toward direct support being required to maintain its supply chain. The analyst also pointed out that Samsung also needs to provide direct support to maintain its semiconductor supply chain, with this year’s government direct support for the semiconductor industry at only 1.3 trillion won. 

/ Business Korea

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