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South Korea and Taiwan excel in chipsets

Intel Corporation of America earlier announced plans to spend $ 20 billion by 2024 to build two new chipmaker facilities in Arizona.

But even if it manages to stem China’s growing influence in the global supply chain, it still faces leverage a company South Korean Samsung anda company Taiwanese TSMC.

A research report issued by IC Insights Yet Intel’s $ 20 billion isn’t close enough to take on these Asian giants.

The report stated that governments need to spend at least $ 30 billion annually for at least five years to have any reasonable chance of success.

This is an indication of the minimum spending that the United States, China and the European Union need to develop chip makers that are comparable to Samsung and TSMC in terms of production technology and capacity.

Chip makers other than Samsung and TSMC have remained wary about capital investment due to the high costs of building factories.

And according to IC Insights’ report, Samsung has been the world’s largest spender since 2010, and Intel is barely catching up with TSMC which ranks second.

Together, Samsung and TSMC are expected to account for 43 percent of total global capital spending this year.

Samsung and TSMC have dominated the global chip industry for the past two decades, andThe recent auto chip crisis is one of the negative effects of monopoly.

While Intel’s significant investment is driven by the competition between the United States and China, its strategy should also be to bridge the gap with the two largest companies.

For China, IC Insights’ estimate of $ 30 billion annually for at least five years is an ambitious goal.

The public and private sectors in China have made concerted efforts to boost the industry in the country since 2014, but capital spending by domestic chipmakers between 2017 and 2020 amounted to only $ 44.7 billion.

Samsung alone invested nearly double that amount over the same period.

Even if the money was available for China, the IC Insights report said, the trade problems that prohibit the country from purchasing some important pieces of process equipment are definitely hindering Chip makers.

Japan’s Ministry of Economy, Trade and Industry has pledged to attract overseas chip manufacturing plants to make advanced semiconductors in the country, but such efforts are unlikely to yield results.

TSMC plans to invest about $ 189 million to establish a research and development facility in northeastern Tokyo, but this amount is considered small for the company.

The major chip makers in the United States, China, South Korea and Taiwan are unlikely to bear the trouble of building large plants in Japan amid the growing geopolitical risks.

Japan should focus on chipmaking equipment and materials, a region where it still has a competitive advantage.

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