Can the United States Compete for Flea Dominance?
WASHINGTON, DC  FEBRUARY 24: US President Joe Biden holds a semiconductor during his remarks  [+] before signing an Executive Order on the Economy in the State Dining Room of the White House on February 24, 2021 in Washington, DC. (Photo by Doug Mills / Pool / Getty Images)  Getty Images  Microchips are the workhorses of the digital economy. Although they spend most of their time hidden under the hood of devices, supply disruptions are quickly noticed. Right now, the auto industry is cutting production while waiting for chipmakers to restock. The production of smartphones, gaming equipment and home appliances is also affected as chipmakers struggle to keep up with demand. While countries regularly worry about supply chain resilience, microchip manufacturing is particularly vulnerable. It could hardly be more concentrated with Taiwan and South Korea producing over 80% of world production. The Taiwan Semiconductor Manufacturing Company (TSMC) alone is responsible for 55% of production, and much of this happens at its home base, Taiwan, which has long been a hotspot for geopolitical tensions. between the United States and China. While oil has been the most important commodity fueling the world, microchips are emerging as the backbone of the emerging digital economy. To achieve this rapid transformation, major economies must rely more on chip manufacturing. The history of energy development in nations reveals that the answer will depend on government investment and business innovation. Dash for chip independence  Capital investment and operational expertise to become world-class in chip manufacturing is a challenge. But developed economies recognize the need to outsource some production to avoid being held hostage by supply chain disruptions or geopolitical risks. Japan, for example, has placed semiconductors at the center of its growth plans. It seeks to inspire TSMC to set up a research center and partner with local companies to advance the manufacturing of chips for use in 5G infrastructure, autonomous vehicles and artificial intelligence. Meanwhile, TSMC is building a factory (the first in two decades) in the United States in response to Washingtons demand and incentives to relocate some capacity. Intel is also gearing up for its chip manufacturing capacity, as the two companies are strongly committed to expanding in Arizona. This all follows a recent U.S. government report estimating that major supply disruptions in Taiwan could result in a loss of $ 500 billion in revenue for makers of tech and electronics that depend on the production of the United States. Isle. The volatility of the chips looks like oil  When governments rack their brains and wonder how the world ends up in this crisis, the answer is simple. The semiconductor industry is very volatile, which has led many countries in the past to outsource the puzzle. It is very costly to develop onshore processing capacity. The estimated price for each plant in Arizona, for example, is around $ 12 billion to $ 15 billion. They take up to two years to build and a decade for cash flow to turn positive. The other challenge is that the demand for semiconductors is erratic. The returns of the SOX Index, which captures the market value of the worlds 30 largest semiconductor companies, have increased from 50% in one year to 75% in one year. This volatility is more than twice that of the overall stock market and more in line with some of the sharp swings in oil prices. Yearly Returns of the SOX Semiconductor Index  SLC management  Semiconductors are known for their boom and bust cycles, as breakthroughs can quickly disrupt existing demand patterns and force manufacturers to adapt. For a capital intensive business with high fixed costs, this can be very difficult. Right now, there are seismic changes in play: the rise of wearable devices, data centers, electric vehicles, 5G infrastructure, and artificial intelligence are all vying for chip production, and all of these. applications come with a wide variety of demand estimates. Government action needed  The reliable production of microchips is quickly becoming a major economic and safety concern for large economies. A joint study by the Semiconductor Industry Association (SIA) and the Boston Consulting Group (BCG) expects demand for chips to increase by 50% over the next decade. The report concludes that for the United States to regain its relevance in chip manufacturing, government incentives are needed. To have any chance of becoming a world leader and able to compete with China, the SIA estimates that $ 50 billion in government funding is needed to revive the industry and halt decades of decline in US chip manufacturing. . The $ 50 billion has also received backing from a coalition of tech companies, and President Biden has enshrined the request in his infrastructure bill. Therefore, some local government and business partnerships seem like a natural solution given a large initial investment coupled with sophisticated business know-how. Potential impact of new government incentives on semiconductor manufacturing position in the United States  SLC management  Providing public funding for the manufacture of reliable chips must be well managed, otherwise the favored national champions could limit competition and innovation. The defense industry is an example where a few key entrepreneurs dominate, making aggressive breakthroughs in innovation and efficiency difficult. However, the entrepreneurial instincts of the Americas can be powerful with the right structure. For example, the United States achieved energy independence through technological breakthroughs in hydraulic fracturing that occurred faster than anyone imagined. The odds seem good if it can be similarly successful with semiconductors, but it needs to scale quickly with the right level of autonomy to enable corporate ingenuity. As the United States dominates the world in chip design, it needs to extend that to shore-based manufacturing. This document contains the views of the author, but not necessarily those of Sun Life or its subsidiaries and / or affiliates. Sources 1/ https://Google.com/ 2/ https://www.forbes.com/sites/randybrown/2021/07/14/can-the-us-compete-for-chip-dominance/ The mention sources can contact us to remove/changing this article  What Are The Main Benefits Of Comparing Car Insurance Quotes Online  LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. 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