IEEE Circuits and Systems Magazine - Q3 2022 - 44

3. Governments and Companies Reaction
Nowadays economies are linked together and it is not
possible for a nation to become completely autonomous
in the production of high-tech products. However, reliance
on a single chip supplier like TSMC has proved very
dangerous, and China's long-term concern over the independent
status of Taiwan makes this worse. Through
investment along the semiconductor value chain on
equipment and materials, design, advanced manufacturing
and packaging, and testing, the goal of governments
is precisely to strengthen their resilience to external
shocks and safeguard their technological sovereignty.
Securing a stable supply of chips has become a national
priority. Below is a summary of the main actions undertaken
by the main players.
The U.S. Senate on June 8, 2021 passed the U.S. Innovation
and Competition Act (USICA), which includes
$52 billion in federal investments for the domestic semiconductor
research, design, and manufacturing provisions
in the CHIPS for America Act (passed in 2020 as
a part of the National Defense Authorization Act, but
left unfunded). Congress is also considering legislation
called the FABS Act that would establish a semiconductor
investment tax credit5. On September 2021 Intel announces
$20 billion in two new plants in Arizona6. Intel
announced also that it would invest up to $95 billion in
European chip-making facilities, and on January 2022
announced plans for an initial investment of more than
5In August 2022 President Biden signed the $280 billion CHIPS
and Science Act into law, which includes $52 billion in semiconductor
subsidies.
6The cost of building a new fabrication plant (fab) is >$20 billion
for 5-nm nodes and the cost of designing a new chip (taping out) is
> $500 million.
$20 billion in the construction of two new leading-edge
chip factories in Ohio [15].
In October 2021 Micron announces over $150 billion
in global manufacturing and R&D investments for memory
chips [16]. In November 17, 2021, Texas Instruments
announced a new semiconductor campus in Sherman,
Texas, which could cost up to $30 billion and include up
to four fabrication plants in total [17].
Taiwan's industry has likely years of growth ahead of
it with only a few competitors over the next decade. Morris
Chang, who founded TSMC says it would be impossible
for the U.S. to have a full chip supply chain onshore
[18]. In April 2021 TSMC announced it was planning to
invest $100 billion over the next three years in new fabs
to meet growing demand [19].
South Korea announced a plan in May 2021 to spend
Figure 5. U.S. President Joe Biden holds a silicon wafer during
the virtual Semiconductor and Supply Chain Resilience
CEO Summit in the White House's Roosevelt Room, April
12, 2021. The CEOs and senior leaders were from industries
affected by the chip shortage, including representatives
from American semiconductor producers, tech companies,
automotive manufacturers, and other companies that use
semiconductors.
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IEEE CIRCUITS AND SYSTEMS MAGAZINE
$450 billion over the next ten years on new semiconductor
manufacturing capabilities. Semiconductors are already
Korea's largest export (14.6%) most of which is
memory products-DRAM and NAND Flash memory.
The plan instead aims to boost the nation's advanced
logic chip production [20].
China is keen to develop semiconductor independence,
both in designing and manufacturing cutting-edge chips,
as part of its Made in China 2025 industrial strategy. In fact,
semiconductors are the largest Chinese imports. In 2019,
China set an objective of expanding its domestic production
of semiconductors (including from foreign firms in
China) to meet 70% of domestic demand by 2025 [21]. The
urgency to do so has been aided by U.S. sanctions against
Chinese telecom giant Huawei and its internal chip unit,
HiSilicon. China's policies encourage foreign semiconductor
companies to transfer technology, intellectual property
(IP), talent, and research and development (R&D) to
operations in China (though U.S. government expressly
discouraged its companies, starting with Intel and AMD,
from boosting chip production and design in China). The
China's approach includes: 1) Tax, trade, and investment
measures; 2) Forced joint ventures & partnerships; 3)
Government subsidies; 4) Strategic foreign acquisitions;
5) Technology licensing & equipment import; 6) Talent
recruitment and return of Chinese expatriates [22]. As a
result, chipmakers worldwide started construction of 19
new fabs in 2021 in China, with another 10 in the works in
2022. Moreover, 17 fabs from Chinese-owned companies
will start construction from 2021 to 2023. China's SMIC,
the world's fifth largest silicon foundry in sales will invest
$8.87 billion for new 14-nm chip plant in Shanghai [23].
But many other fabs in more mature technology nodes
are in construction. China also is making a big push in
the new segment of power semiconductors based on two
wide-bandgap technologies, silicon carbide (SiC) and gallium
nitride (GaN).
THIRD QUARTER 2022
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