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Unlike in other critical supply chains, the US and its partners currently have the edge in innovation and increasingly, production of semiconductors. Whether the US can hold on to its semiconductor supremacy depends on the success of its industrial policy and how quickly Beijing succeeds in domestic industry indigenization.
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In semiconductors, unlike in other critical supply chains, the US and its partners currently have the edge in innovation and increasingly, production, over China, write Rob York and Akhil Ramesh of Pacific Forum. The global semiconductor supply chain, however, has unique vulnerabilities given that the world’s largest pure-play foundry is in Taiwan, a key flashpoint in global geopolitics. Beijing has successfully used industrial policy to shore up its global dominance in critical minerals, electric vehicle batteries, and other critical technologies. Semiconductor supremacy will largely be determined by whether the US achieves self-sufficiency in fabrication and can friend-shore both raw materials and assembly, test and, packaging or whether China achieves breakthroughs in design technology, in this latest paper in their friend-shoring series.
About the Authors
Rob York Director, Regional Affairs, Pacific Forum
Akhil Ramesh Senior Fellow, Pacific Forum