US and EU Leads $81 Billion Push for Next-Gen Semiconductors, Says Report

The global chip war is rising as the US and European Union have poured nearly $81 billion into developing the next generation of semiconductors.

According to a report by Bloomberg, this funding marks the initial phase of a larger $380 billion global investment to push companies like Intel Corp. and Taiwan Semiconductor Manufacturing Co. to ramp up production of advanced microprocessors. 

“There is no doubt we’ve passed the Rubicon in terms of the tech competition with China, particularly on semiconductors,” Jimmy Goodrich, senior China and strategic technology adviser to the RAND Corp., stated. “Both sides have basically made this one of their top strategic national objectives.”

During the pandemic, concerns around China's technological progress turned into a crisis as chip shortages started to take center stage. 

As the Western superpower is investing heavily in chips, it is turning out to be a threat to China's industrial dominance. 

While this is giving rise to tensions in the US-China trade war, it is also giving a boost to companies like Intel, which have lost ground to rivals like NVIDIA and TSMC.

In the US, just a few months back, officials had reportedly announced $6.1 billion in grants for Micron Technology Inc. This was the last multibillion-dollar grant awarded to establish advanced chip manufacturing facilities in the US, totaling close to around $33 billion for companies such as Intel, TSMC, and Samsung Electronics Co.

The surge in spending is also sparking competition between the US and its allies in Europe alongside Asia as they compete for a share of the expanding market for AI and quantum computing.