US set to triple semiconductor production, widening chipmaking gap with China

US set to triple semiconductor production, widening chipmaking gap with China

WASHINGTON : The US is set to significantly increase semiconductor production by 2032, leading to a wider gap with China in chip manufacturing capabilities

As per a report by the Semiconductor Industry Association (SIA) and Boston Consulting Group (BCG), US is expected to account for 28% of sub-10-nanometer chip production, while China will potentially lay claim to just 2% of the production of advanced chip by 2032.

The US restrictions on semiconductor exports to China alongside the CHIPS Act are the major currents contributing to this disparity.

Presently, neither the U.S nor China can produce sub-10-nanometer chips.

Nonetheless, with US federal support, Taiwan Semiconductor Manufacturing Co., Samsung, and Intel plan to enhance their US investments, enabling the production of the world’s leading chips within US territory.

In 2022, US held a mere 10% of global chip manufacturing capacity with remaining production based out of Asia.

With CHIPS Act in effect, US is expected to triple its semiconductor manufacturing capacity thereby controlling nearly 30% of sophisticated chip manufacturing by 2032. Without the CHIPS Act, this share would have dwindled to 8%.

Meanwhile, while China is trying to amp up its chipmaking capabilities, with its significant $142 billion investment in its domestic semiconductor industry, John Neuffer, president and CEO of SIA stated that China lags behind also because of its lower starting point, especially with regards to design and research & development, where US has historically also maintained its lead.

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