Inside America’s Disruptive Semiconductor Strategy

The Biden administration plans to attract foreign investment to set up state-of-the-art chip manufacturing plants. Then, those chips will be chipped in partner countries like Costa Rica, Vietnam, or Kenya for final assembly, which will then be sent to the world. This will transform the global chip supply chain, which is currently dominated by countries like China and Taiwan. It will also reduce the risk of a global chip shortage, as in the past. 

In his interview with ABC News, President Biden argued that the ability to manufacture more chips in the US would bring prosperity and security from global supply chain disruptions, which were evident during the COVID-19 pandemic and the Russia-Ukraine war. Mr. President also boasted that he had gotten South Korea to invest billions of dollars in setting up a chip manufacturing plant. However, the key part of this strategy is to work with partners to ensure that foreign investment in America is durable and reliable. 

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If all goes right, the US will significantly affect China’s dominance in the chip manufacturing industry. This is extremely important as China has one of the biggest chip manufacturing industries in the world, and it has made multiple threats to its biggest rival in chip manufacturing, Taiwan. If China carries out an attack on Taiwan, the global chip supply will go into the hands of China, which is not ideal for the world, especially for the US, as some of the biggest tech companies in the world hail from the US. 

Ramin Toloui, a Stanford professor who recently served as the assistant to the State Department’s Bureau of Economic and Business Affairs, said, “The focus has been to do our best to expand the capacity in a diverse set of countries to make those global supply chains more resilient.” He also said that over the last three years, the Biden Administration has received $395 billion in semiconductors and around $400 billion in green energy technology. 

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