According to Virginia senator Mark Warner, the United States may be underestimating China’s global impact. In other words, if the United States does not take the threat China poses seriously and begin marking territory as soon as possible, China may soon surpass the US in technological, military, political and economic power and worldwide influence.
According to the senator, all cutting-edge semiconductors are produced in Taiwan, which has been a steady resistant against China’s communist ideology and geopolitical expansion. Semiconductors are an important component of electronic equipment, allowing for advancements in communications, computers, healthcare, military systems, transportation, and renewable energy, among many other uses. There has been a larger reliance on them in the globe recently. The United States used to produce one-third of the world’s semiconductors twenty years ago. Now Taiwan Semiconductor Manufacturing Co. (TSM) is the biggest semiconductor chip producer. While Intel generates more income, TSM manufactures around 90 percent of the world’s sophisticated processors. In terms of revenue, TSM also controls more than half of the worldwide semiconductor foundry market. This is signiant because it means that the US is not acting as a world leader anymore.
Perhaps one reason why the US is no longer a leader in this field, is due to the low pricing China is able to provide to its customers.
China is a rival to the United States, according to Warner. Warner believes that the Chinese challenge has compelled him to convene leaders of Congress, business, and the intelligence community to explore how the United States can maintain its global strength and influence without jeopardizing its relationship with China.
The Virginia senator would want to see the U.S. government approve a measure mandating an investment of up to $52 billion in the construction of at least ten new semiconductor manufacturing plants, as well as an increase in research to assure continued excellence.
Unfortunately, the bill that Warner wanted the US to invest in was derailed due to actions taken in Europe. Due to higher subsidy provisions in European countries, companies that produce semiconductors have more incentive to move their operations there. For example, Intel,, a major American corporation, has plans to develop a large facility in Germany, a country that has offered 8 billion euros in subsidies this year.
However, if America wishes to maintain its leadership position, it must be prepared to succeed in the semiconductor industry. The economic prosperity and national security of the United States depend on cutting-edge semiconductors in order to remain ahead of global rivals. Warner thinks that this issue transcends the United States and China. It is a global competition, and time is of the essence.
Warner thinks that the United States must move more quickly because investments in this industry require years to complete. The nation that leads the world in sophisticated chip design and manufacturing will also have a significant advantage in the global race to implement game-changing technologies such as 5G, artificial intelligence, and quantum computing. To illustrate his point, he cited the corporation Taiwan is constructing a new chip factory in Arizona, which will take years to finish. Therefore, the United States must act swiftly to attract more investment.
China is not the only nation that offers subsidies to attract significant investors. It is the trend in many other nations, so the United States may consider following suit in order to avoid regrets in the future.