Silicon Dessert: The U.S. Race to Bring Chipmaking Home & China’s Strategic Wafer Play
— The U.S. and China are racing toward semiconductor independence by strengthening their domestic capabilities across manufacturing and materials.
The U.S. is making a strong push to reconstruct its homegrown semiconductor industry with the rising global friction and diplomatic strain. The efforts points towards the U.S.-led movement that earned the nickname the “Silicon Dessert”. The prime motive of this initiative is to reclaim the state-of-the-art microchip production back to the home soil. Sharpening efforts towards self-reliance, China, on the other hand, is picking up pace in advancing towards a self-devised approach in the critical components of microchip production, primarily in wafer materials and substrates.
The U.S. Chip Comeback: Domestic Revival of Manufacturing & Building Silicon Dessert
The U.S. government has taken several initiatives backed by the Chips and Science Act of 2022 channeling financial support as subsidies, tax breaks and grants to entice domestic chip manufacturers back home aiming at boosting native chip production. Several private companies have answered the call; companies like TSMC have agreed to pour in $165 billion for the purposes of constructing cutting-edge fabrication units and R&D hubs. The primary base of these production centers is Arizona’s booming “Silicon Desert". The drive is not restricted to chip manufacturing rather it also focuses on the wafer manufacturing. Urging the revival of America’s tech related self-reliance, massive federal support was offered to GlobalWafers - $406 million for the purpose of setting up wafer productions plants at Texas and Missouri.
China’s Wafer Play - Building Self-reliance from Scratch
China follows a deviant strategic route, investing more into the production of raw materials and substrates for semiconductor manufacturing rather than targeting end-to-end chip fabs. The strategy is geared towards the goal of 50% domestic control over wafer production. The tactical maneuver of Beijing to buffer its chip industry from external shocks is evident in their adopted route towards wafer play. China’s disinterest in foreign exports is reflected in their attempts to lay authority over the early stages of the supply chain.
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