U.S. looking to regain supremacy in the production of chipsets
The U.S. was once known to be biggest manufacturing market in the world. However, due to some changes in the operating models of businesses in the semiconductor industry, the country is lagging behind.
The two companies coming across our mind when thinking of chip-making are Taiwan’s TSMC and Samsung Electronics from South Korea. The two giants hold more than 70% of the control in the manufacturing of semiconductors across the world. The U.S. was once known to be biggest manufacturing market in the world. However, due to some changes in the operating models of businesses in the semiconductor industry, the country is lagging behind.
Additionally, a global semiconductor supply disruption and rising tensions with China have strengthened Washington’s analysis over the supply chain. The market comprises of many small players, and they have initiated steps in order to bring the manufacturing of chipsets back to U.S. to regain supremacy. The U.S. is allocating billions of dollars and is searching for alliances with other nations.
Taiwan’s TSMC and Samsung from South Korea took advantage of the fabless business models by investing heavily in their initial stages to incorporate state-of-the-art manufacturing technologies. As a result, if any telecomm giants wants chipsets equipped with latest technologies for their smartphones, they have to ask TSMC to do so.
According to Trendforce, TSMC holds 55% of the manufacturing market share as against Samsung which holds more than 18%. The countries Taiwan and South Korea account for 81% of the total market production of chipsets across the world stating their dominance around the world.
In February 2021, The U.S. President had signed an executive order reviewing the present semiconductor industry to identify risks in the supply chain. Out of USD 2 trillion stimulus package provided by the government, USD 50 billion has been allocated for manufacturing of semiconductor and its research. CHIPS bill under the America Act is working on providing ways for the legislative process.