how the US plans to regain leadership in the electronics industry by 2030
With the start of a trade war between China and the United States, both states began to actively develop the electronic industry within their own borders. At the same time, China has a much more difficult time, since the country is under very strong US sanctions. Nevertheless, the Celestial Empire is making quite noticeable progress, which we wrote about more than once or twice.
But the United States is not sitting idly by. Sanctions are one thing, but the development of our own electronics industry is another. Over the past couple of decades, the country has lost its leading position in the production of electronics. Well, now the States are actively restoring the industry. Details are under the cut.
What is the US planning to do to regain its leading position?
Representatives of the industry and officials associated with it understand that nothing can be done quickly. Increasing production capacity to the required indicators will require huge resources, including finance, specialists, initial components, supply chains, etc. You can’t build something like this in a couple of years.
According to this, the States set the goal is to restore leadership positions in electronics manufacturing by 2030. Yes, of course, we can say that during this time “either the padishah will die, or the donkey will die.” But as far as one can understand, the country is still seriously interested in the implementation of plans. And the 7 years remaining until 2030 are still not such a huge period that it would be impossible to control those responsible for the implementation of the plan. This is not 20-50 years when anything can really happen.
What does the return of leadership positions mean? States going to start production by 2030 the most modern chips in their own factories, which will be built or expanded domestically. Those. technologies will continue to be transferred to partners, but still on their own – a very big calculation.
The government of the country plans to help deploy at least two new large-scale clusters of advanced logic factories. Both must have a strong supplier ecosystem, specialized infrastructure, and a strong R&D base.
It is worth noting that a couple of decades ago, the US share in the global semiconductor market was about 40%, while now this figure is only 12%. Analysts believe that if the situation is “let go” and no measures are taken to support the domestic industry, then the States will completely lose all control over the industry. At the same time, enterprises that operate in the country produce only chips according to the technical process up to 10 nm. Everything below is produced by partners in South Korea and Taiwan.
How realistic is all this?
The plan is quite realistic. The fact is that already now Intel, TSMC and Samsung Foundry are building factories for the production of microcircuits in the USA from scratch.
For example, the South Korean corporation Samsung announced plans to invest about $200 billion in the construction of 11 new factories in Texas at once. The corporation will receive tax benefits promised by the state administration.
Well, Intel started building the Fab 52 and Fab 62 in Arizona. These facilities will be used to manufacture chips using the “Intel 20A” technology, which, as far as can be understood, corresponds to the 5nm process technology. “Intel 20A” implies the use of new GAAFET transistors.
This company will also build factories in Ohio. It is known that eight production lines will be deployed here at once. The deployment of the planned infrastructure will require over $100 billion (this is not a typo). But for now, it is planned to deploy part of the planned capacity, so the company is investing a 40 billion budget.
TSMC plans to build a 5nm chip factory in the US. It is being built near Phoenix, Arizona, and the decision to build was made a couple of years ago. For this company, building a factory in another country is a kind of achievement, since in its history it has built only two factories outside of Taiwan. One in the US and one in China.
The company has hundreds and thousands of wholesale customers in the United States, so cutting some supply chains can be beneficial for it. After all, both shipping costs and the time it takes to deliver products from the factory to the customer are reduced.
If all goes well, the US position as a manufacturer of semiconductor components and systems will be much stronger than it is now.
GlobalFoundries is going to allocate about $1 billion to expand the already existing industrial facility – Fab 8. In addition, it is planned to begin construction of a new plant. It will be built in Malta, New York.
Texas Instruments is one of the largest manufacturers of not the most complex, but very necessary components for thousands of devices. We are talking about audio amplifiers, power controllers and other systems. In total, the company’s portfolio now includes about 45,000 different products. The company is currently building a new factory, which should be ready by 2025. The facility is being built in Texas, and this is one of the most expensive projects for the state. Its total cost is about $30 billion. True, the period of work is about 10 years, so you’ll have to wait.
What else?
In the second half of 2022, the US Senate approved a bill that aims to support domestic electronics manufacturers. Support is provided through tax cuts in relevant industries and funding for research organizations that are engaged in specialized projects. In addition, funds are allocated for the construction of factories that will produce semiconductor elements and electronic systems. True, if in the case of China, more than a trillion US dollars were allocated, then the United States decided to allocate only $52 billion for its program. Perhaps the government hopes that American companies will invest in the development of their own plants and factories.
At the same time, as mentioned above, some companies began to build their own factories even before the initiative from the state. After the pandemic and the start of the trade war, it became clear that the supply chains needed to be more reliable, so the globalization of the production of electronic components is not always an option. Therefore, some manufacturers started building factories a relatively long time ago.
Well, among other things, the United States will continue to put pressure on China and its own partners, who are still cooperating with China. An example is negotiations with ASML, a manufacturer of lithographic equipment from the Netherlands. The company has already refused to cooperate with the Celestial Empire in relation to new technologies, but now it may be banned from selling older systems.
This company cannot sell new EUV systems to China starting in 2019. But she is still working with Chinese partners, selling them systems of previous generations, DUV. If these measures are indeed introduced, then China will have problems. It is quite possible that in one way or another the country will be able to solve them, but this will take time and resources, which, despite the size of the PRC, are still limited.
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Be that as it may, it is now difficult to predict the development of the electronics industry in both the US and China. We need to wait a bit – probably in six months or a year it will become more or less clear what can be expected from both countries and their industry.
