The US will struggle to take on Asia over chips

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The United States has been able to go ahead of China and other Asian hubs for many years, “dropped the ball.” So Gina Raimondo, the US Secretary of State, said in an interview with me in 2021.

Four years later, the chip remains a battlefield in the US-HINA race for technology advantage, and US President Donald Trump wants to shift the very complex and delicate manufacturing process, which has now been completely performed for decades for decades.

His tariff policy will liberate the US economy and bring his jobs home, but some of the largest companies have long been having a long hardship as an experienced worker at the US plant and a poor quality of agricultural products.

How will Trump be different? And can the United States produce them given that Taiwan and other areas of Asia have a secret source for making high -precision chips?

Semiconductor is the key to majoring in everything from washing machine to iPhone, military jet, and electric vehicles. This small silicon wafer, known as chip, was invented in the United States, but today’s most advanced chips are produced on a phenomenal scale.

Making them is expensive and technically complicated. For example, the iPhone contains chips designed in the United States in Taiwan, Japan, or Korea, and is manufactured using rare earths, mainly mined in China. Next, they can be sent to Vietnam for packaging, and can be sent to China for assembly and testing before being delivered to the United States.

It is a deep integrated ecosystem that has evolved for decades.

Trump praised the chip industry but threatened with tariffs. He told Taiwan’s semiconductor manufacturer (TSMC) industry leader. He said he should pay 100%taxes if he does not build a factory in the United States.

Through this complex ecosystem and fierce competition, we must be able to plan higher costs and investment demands in the long run beyond the Trump administration. Continuous changes in policy do not help. So far, some have shown their will to invest in the United States.

The important subsidies provided to private companies that develop chips by China, Taiwan, Japan, and Korea are a big reason for success.

It was an accident behind the US Chip & Science Act, which was law in 2022, according to President Joe Biden. Efforts to dismiss chip manufacturing and diversify the supply chain -Efforts to diversify the supply chain by assigning subsidies by providing incentives for subsidies, tax deductions and domestic manufacturing.

Some companies, such as the world’s largest chip manufacturer TSMC and the world’s largest smartphone manufacturer, Samsung, have become the main beneficiaries of the bill, and TSMC has subsidized and loans for Arizona’s plants, and Samsung is estimated to receive $ 600 million for Texas Taylor’s facilities.

TSMC, along with Trump, announced an additional $ 100 billion in investments in the United States and reached $ 65 billion for three factories. Diversifying chip production is also effective for TSMC, and China is repeatedly threatening to control the island.

However, TSMC and Samsung challenged investments, including a surge cost, an experienced labor recruitment, a construction delay, and a resistance of local unions.

Marc Einstein, the research director of Market Intelligence Firm CounterPoint, said, “This is not just a factory for making a box.

Despite the US investment, TSMC said most manufacturing would remain on Taiwan, especially in the most advanced computer chips.

Today, TSMC plants in Arizona produce high -quality chips. But Chip War: Chris Miller, the author of fighting for the world’s most important technologies, claims that “they are the generations behind Taiwan.”

“The problem of scale depends on how much investment is made in the United States and Taiwan,” he said. “Taiwan has much more capacity today.”

In fact, it took decades for Taiwan to build its capabilities, and despite China’s threat, the industry spent billions of dollars to steal Taiwan’s ability, but it continues to thrive.

TSMC was a pioneer of “Foundry Model” that Chip Makers designed and manufactured chips for other companies.

TSMC was able to compete with the best engineers, experienced labor and knowledge sharing and the United States and Japanese giant, with a wave of silicon valley startups such as Apple, Qualcomm and Intel.

“Can the United States make chips and create jobs?” Ask Einstein. “Of course, but they will put the chip down to the nanometer? Probably not.”

One reason is Trump’s immigration policy, which is an immigration policy that can limit the arrival of skilled talents in China and India.

Einstein said, “Even Elon Musk is experiencing immigration with Tesla engineers.”

“It is a bottleneck phenomenon, and there is nothing they can do, unless it completely changes its position on immigration.

Nevertheless, Trump doubled with tariffs and ordered a national security trade investigation into the semiconductor sector.

Einstein said, “This is a machine wrench -a big wrench.” For example, Japan was based on the economic revitalization of semiconductors and the tariffs were not in the business plan. “

According to Miller, long -term impact on the industry will focus on domestic manufacturing in major economies in China, Europe and the United States.

Some companies can find a new market. For example, China’s technology giant Huawei has expanded to Europe and emerging markets, including many countries in Africa, facing Europe, UAE, Saudi Arabia, Malaysia and Malaysia and export control and tariffs, but the margin of developing countries has faced export control and tariffs.

Einstein mentioned China E & C AI Chatbot, saying, “China ultimately wants to win-it must innovate and invest in R & D.

“If they make a better chip, everyone will go to them. Cost efficiency is what they can do right now, and what to expect is a very high technology production.”

In the meantime, new manufacturing hubs can appear. According to experts who say they are more likely to be integrated into chip supply chains than the United States, India has many promises. Geographically closer, cheaper labor and education.

India knew that it was open to chip manufacturing, but land acquisition and water -chip production requires the highest quality water and a lot of problems.

The chip company is not entirely mercy of tariffs. Demand and demand for chips in major US companies such as Microsoft, Apple and Cisco can be pressure to overturn the chip division on Trump.

Some insiders have secured exemptions for smartphones, laptops, and electronic tariffs by the intense lobby of Apple CEO Tim Cook, and Trump has released a ban on chips that NVIDIA can sell to China.

Trump asked the Apple product in a Monday elliptical office. Trump added, “I am a very flexible person.”

Mr. Einstein thinks everything is ultimately attempting to come down. He and his executive know that they cannot build a larger building regarding chips.

Einstein said, “I think the Trump administration is with the owner of Tiktok, and he says he will no longer run in the United States unless he gives an Oracle or another US company.

“I think they’re trying to fantasy here -TSMC doesn’t go anywhere. Let’s just deal with Intel and bring a piece of pie.”

But the blueprint of the Asian semiconductor ecosystem has a valuable lesson. No country can operate its own chip industry in any country, and it takes time to create an efficient and increasing high -end semiconductor.

Trump is trying to create a chip industry through protectionism and isolation. It is the opposite that the chip industry can emerge throughout Asia: cooperation with the globalized economy.

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