US seeks to catch up with Taiwan in chip production

Microchips, along with their parts and components, have become an important part of modern life. They are used in computers, machines, telephones and many other electronics and devices that we use daily. Of course, various metal parts and components are integral to the manufacture of these microchips. How has the microchip industry been affected by current world events? Also, what does the future hold for US microchip supplies?

Microchips in the automotive industry

A recent article noted how a global auto price spike has caused a huge surge in demand for microchips. This has proven to be one of the main catalysts for the global shortage of microchips. With advances in automotive technology, particularly in the growth of electric vehicles, this assumption does not seem far-fetched.

However, technological advancements keep happening all the time. As a result, microchips and products like silicon, that go into their manufacture, will continue to grow in demand.

US and China race Taiwan over microchip technology

Currently, Taiwan remains one of the world’s leading manufacturers of microchips and semiconductors. However, US manufacturers are trying to catch up with Taiwan’s microchip production rate. That said, currently the The United States produces only about 12% of global microchip supplies. These valuable components are incredibly difficult to manufacture, not just for the United States, but for most countries. Computer chips and semiconductors are made up of many delicate layers of silicon with mazes of patterns between them. For this reason, the manufacture of these crucial parts is not only time-consuming but also expensive.

Taiwan manages to produce an abundance of microchips in part thanks to Taiwan Semiconductor Manufacturing Co Ltd., one of the world’s leading chip producers. The country also excels in semiconductor manufacturing technologies, making it a major player in the global microchip industry.

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Some believe this makes Taiwan a target for China, as many Chinese microchip parts come from Taiwan. Therefore, if any type of conflict were to arise involving Taiwan, it could have immediate global ramifications in the microchip industry.

The United States is progressing

Recently, President Biden has signed a microchip bill aimed at strengthening America’s microchip industry. After all, since the early 1990s, America’s microchip and semiconductor manufacturing industries have been cut in half. Manufacturing difficulties, as noted above, contribute enormously to this. That’s why the goal of this new bill is to jump-start US semiconductor manufacturing efforts.

Yet another layer of incentives can be found in the new bill. It stipulates that companies investing in microchip manufacturing facilities will receive a 25% tax credit. Despite the good news, moving semiconductor manufacturing to the United States will come with challenges. For example, microchip manufacturing, like many industries, has seen a significant downturn with the pandemic. This caused a temporary halt in technological progress. Of course, supply chain shortages didn’t help.

Yet issues like this are ones the new bill strives to minimize. Hopefully, the new bill will reduce microchip shortages and help the United States catch up with Taiwan in the new race for microchip manufacturing dominance.

By AG Metal Miner

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