The United States has begun to take action to revive the semiconductor industry. In the context of the Biden regime’s advocacy of a return to production policy, large manufacturer Intel will invest about 2 trillion yen to build new factories in the United States. It is also getting involved in the foundry business of mass production of products developed by other companies. Semiconductors are the core product that supports the digital society, but the most sophisticated development and manufacturing experience tends to flow to Taiwan and South Korea companies that are better in terms of production share. The competition for technological dominance involving the whole country is in full swing.
Intel announced on March 23 that it will invest $20 billion in the next few years to build a new factory in Arizona in the western United States. Aiming to be operational in 2024, it will produce cutting-edge semiconductors for personal computer CPUs (central processing units), etc., with a circuit width of about 7 nanometers (a nanometer is 1 billionth of a meter).
Intel has been slow in developing 7nm and will make a huge investment to make a comeback this Time.
Intel’s competitors are currently ahead of the curve. Comparison of the first 3 companies this year, the amount of investment in equipment, TSMC (TSMC) for $ 28 billion, Samsung Electronics is basically the same. Intel’s investment is about 1 trillion yen less.
Now, leading the industry in terms of semiconductor production and technological strength are TSMC and Samsung Electronics. In terms of foundry operating income, TSMC is over 50% in share. In terms of microfabrication, both companies have mass-produced 5nm products that are one generation ahead of 7nm, and commercial investment has been initiated since 2020.
TSMC’s 5nm products will all be supplied to Apple’s smartphone “iPhone 12″ in the U.S. starting in the fall of 2020. The most important strategy for maintaining technology strength and attracting quality customers is to leave behind the large investments of other companies.
Intel had pulled the world’s technology in the field of personal computer CPUs in the 1990s, but lost momentum in the 2000s. Intel adopted a vertically integrated business model that did everything in-house from development to production. At that time, the “fabless” operation adopted by Qualcomm and other companies in the United States had begun to rise, but Intel had insisted on the business strategy of refusing to OEM for other companies and focusing on its own products.
The fabless companies of choice were TSMC and Samsung, with TSMC making semiconductor production its main business. Foundry companies produce a wide range of semiconductors, including Home appliances, smartphones and automobiles. Customers and strong suppliers come naturally from around the world, and the accumulation of technological experience progresses.
The virtuous cycle is evident in the development and production of next-generation semiconductors where higher technological capabilities come into play. EUV (extreme ultraviolet) lithography equipment, which is considered indispensable for cutting-edge semiconductor production beyond 5 to 7 nanometers, maintains a shortage of supply, but TSMC and Samsung have established deep connections with ASML, a major Dutch semiconductor equipment company involved in this equipment.
TSMC, for example, is also in the final stages of developing a 3nm product that is 1 generation ahead of 5nm. By 2024, mass production of the more advanced 2nm product will be initiated, and preparations for the construction of a new plant in Hsinchu, Taiwan, are now moving forward.
The U.S. government is increasingly filled with a sense of crisis over Intel’s declining competitiveness. U.S. Secretary of Commerce Gina Raimondo attended Intel’s press conference on the 23rd, saying that “it will create jobs and strengthen security and supply chain” and praised the plan.
The U.S. government attaches importance to the semiconductor industry. President Biden signed a presidential order in February to adjust the supply chain of semiconductors. At the same time, Congress supported the semiconductor investment assistance measures included in this year’s National Defense Authorization Act. Congress was asked to include $37 billion in subsidies, etc.
The U.S. regime and Congress accelerated the strengthening of domestically produced semiconductors because the risks in the supply chain are increasing. Boston Consulting Group (BCG) statistics show that the U.S. share of production has fallen from 37 percent in 1990 to 12 percent in 2020. Taiwan, which accounts for the largest share of 22%, is at geopolitical risk. Mainland China, which invests heavily in subsidies, is expected to reach 24% by 2030, holding the largest share.
To cater to the intentions of the Biden regime, Intel announced this official launch of OEM. This is a business that has previously been kept at arm’s length as a risky investment, but the profitability of the business will increase if fabless companies wish to find foundries in the United States.
The chief executive officers (CEOs) of Microsoft and IBM, who seek to get involved in the semiconductor business, attended Intel’s launch remotely to issue comments expressing welcome.
Semiconductors are also used in fighter jets and artificial satellites, and are indispensable in the military. Under the former Trump regime, the Defense Department continued to advance negotiations with Intel for a new factory. While the Biden regime took office in January, the global semiconductor shortage became severe, and U.S. government sources said that “the sense of crisis is rapidly increasing.
In order to revive as a technology power, the government and business cooperation plan has been launched.
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