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Will the U.S. Sustain in Microchip Dominance Competition?

Microchip is the primary cell unit driving the digital economy. Often hidden and not put on a display among other devices, microchips are currently emerging as a dominating component for multiple industries adopting digital environments.

Currently, the automotive industry is witnessing a stringent production pattern while awaiting chip manufacturers to restock.

Similarly, the production rate of smartphones or gaming equipment and advanced home appliances has also undergone glitches as chip manufacturers are wrestling to meet the unrealistically increasing demand from various industries.

Prevailing conditions of countries fretting about supply chain strength, individually the Microchip manufacturing has been uniquely vulnerable.

As a result, the chip manufacturing industry is aggressively concentrated, with Taiwan and South Korea producing more than 80% of the total global output.

 Taiwan houses the Taiwan Semiconductor Manufacturing Company (TSMC), which accounts for 55% of the production and has been the main stimulator for the rising geopolitical tension between the United States and China.

TSMC is onboard to construct a plant in the United States responding to Washington’s appeal coupled with incentives enabling the transfer of some capacity. Intel is also seen to accelerate its chip manufacturing capacity amidst the probable scope offered by the two companies to expand Arizona.

The semiconductor industry is witnessing a volatile atmosphere, which led many countries inclined towards outsourcing. It is also costly to build onshore processing capacity. For instance, the chalked-out price for each plant in Arizona is approximately $12-15 billion.

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