To begin with, chips are now a crucial component of many facets of daily life and international relations, such as production, innovation, networking, trade, communication, and collaborations. Second, given the interdependencies in technology and commerce, the two greatest economies in the world, as well as their allies and partners, are at the forefront of this competition.
Notably, there will be immediate effects on both nations’ semiconductor sector ecosystems. An executive order addressing US investments in specific national security technologies and goods in worry-inducing nations was signed by President Biden on August 9. This order represents the Biden administration’s increased attempts, in spite of earlier steps, to stop talent and technology leaks to China in the high-tech sector.
Politically, this action emphasizes China’s role as a constant influence on Washington’s bipartisan agreement and raises the possibility that President Biden might not be reluctant to capitalize on the resulting political gains.
Source: Asia Times
US threat assessments are primarily influenced by worries that China may use unfair measures to gain an advantage in the technological competition. According to a 2017 study by the United States Trade Representative (USTR), China’s aggressive technology policies threaten millions of employment in the US technology sector with its unfair business practices, such as forced knowledge transfer.
In 2022, the Biden administration will swiftly combat China’s capacity to manipulate tech access and control by introducing the Chips and Sciences Act. This Act allocated $53 billion for the restructuring of American labor, semiconductor production, and related R&D. While the US has not yet experienced the full range of advantages and disadvantages brought on by this restructuring, some gains have already been realized.
Within a year of implementing CHIPS, the Biden administration made tremendous domestic progress. Over $166 billion in investments related to semiconductor and electronics manufacture have been announced by several US corporations. The involvement of 50 community colleges spread across 19 states to launch new programs or expand current ones appears to be a positive step for employment growth in the semiconductor industry. Additionally, since the Biden administration began office, US semiconductor and electronics venture commitments from corporations have surpassed $231 billion. The chip war between China and the US has considerably more complicated global effects.
Source: AI Jazeera English
The US administration has tempered its attitude to derisking, suggesting that a complete secession may not be achievable, after the initial strong signs of decoupling from China. This response implies that partnerships and interdependence continue to dominate the global semiconductor sector. Nevertheless, a small number of nations, including Taiwan, the Netherlands, Japan, China, and the US, continue to control important areas including resources, production, packaging, and distribution. An intensified stance against China in this area is anticipated to result in retaliatory measures from China, which could have an effect on the US.
Although both sides in the chip war have been strategic in their answers to one other’s choices, there are subtly developing divisions that are likely to fundamentally alter the interconnection of the global supply chain and the locations of the value chain. Meanwhile, if India strengthens its capacities in this area to absorb the spin-offs, it may benefit significantly from a global realignment resulting from the chip war between the US and China.
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