Global semiconductor market tilts against China as chip wars escalate - Washington Times
Andrew Salmon
13 hours ago
SEOUL, South Korea — As the worldwide semiconductor landscape undergoes massive expansion and geopolitical shifts, Japan and India are poised to rise as major manufacturing hubs, boosting U.S. hopes to curb China's rising clout in a critical market for 21st-century industry.
Over a quarter of the new chip-making plants coming online globally through 2026 are in China, which already supplies between 50% and 60% of the world market for less sophisticated low-end chips. U.S. officials and private analysts were rocked when China recently took an unexpected technological leap, producing a home-grown 5G smartphone chip after foreign supply chains were cut off.
Given China's strengths, the rise of two new democratic supply nodes looks positive for Washington, which since 2017 has been trying to corral allies into its corner to maintain dominance of leading-edge semiconductors. Both Japan and India have their own security contentions with China, influencing economic security policies.
Tokyo is allied with Washington and is suspicious of Beijing's moves toward Taiwan and in the East China Sea. New Delhi administers the world's largest democracy and though politically non-aligned, is China's natural rival for influence across South Asia and has clashed directly with Beijing in the Himalayas and the Bay of Bengal.
Chips with everything
All of which is of intense interest to Ajit Manocha, the Indian-American president and CEO of SEMI, the semiconductor industry's lead trade voice. In a wide-ranging interview with The Washington Times, Mr. Manocha, a 43-year veteran of the industry, recalled he first inspired to enter the sector by a U.S. science-fiction TV series that now doesn't seem all that far-fetched.
"I used to watch 'Knight Rider,' though I thought it was sort of unreal," Mr. Manocha said. "But it is real now: You can tell a car where to take you."
For decades, semiconductors, the central component in digital technologies, fascinated only manufacturers and tech-minded enthusiasts. That changed with Donald Trump's presidency, which identified chips as strategic weapons in a larger economic and political clash with China.
The sector is massive. Last year, according to SEMI data, global revenues were $580 billion. By 2030, Mr. Manocha predicts that figure will almost double, to $1 trillion — meaning the growth of the last 60 years will be replicated within 10 years.
"Semiconductors are central to every industry," he said. "There are a lot of convergences."
Seventy-one major new chipmaking sites have been announced for completion worldwide between 2022 and 2026.
The largest number – 21 – are in China; 16 are in Taiwan; 11 are in the U.S. or Mexico; 10 are in Europe and the Middle East; eight are in Japan; and three each are in Southeast Asia and South Korea.
New technologies are giving high-end chips a central role in the global struggle for economic supremacy. "We used to have a killer app every three to four years," Mr. Manocha said. "Now we have multiple killer apps."
Tech pipelines are already loading up with next-generation 6G and 7G mobile telecommunications, the Internet of Things, autonomous vehicles, autonomous machinery, A1, Quantum computing and "neuromorphics" – the interface between the human brain and digital world.
All generate and consume data, spurring exploding demand for data centers. To service this, Mr. Manocha anticipates another 70-80 semiconductor fabrication plants — known in the industry as "fabs" — breaking ground within a decade, above and beyond the 71 already announced,
That's the good news. But there are risks, including the impact of climate change, the data centers' vast appetite for power sources, plummeting Western scientific and engineering talent and the larger U.S.-China geopolitical rivalry that threatens to "de-couple" the world's two most powerful economies.
Sectoral specialties, strategic competition
Political leaders, seeking chip sovereignty and a dependable source of chips should tensions and trade barriers rise, are bringing fabrication capacity home, Mr. Manocha observed. Countries are in a desperate hunt for competitive advantage.
"Every country can invest. … It's strategic for every country," he said. "But it's a competitive world."
Andrew Salmon
13 hours ago
SEOUL, South Korea — As the worldwide semiconductor landscape undergoes massive expansion and geopolitical shifts, Japan and India are poised to rise as major manufacturing hubs, boosting U.S. hopes to curb China's rising clout in a critical market for 21st-century industry.
Over a quarter of the new chip-making plants coming online globally through 2026 are in China, which already supplies between 50% and 60% of the world market for less sophisticated low-end chips. U.S. officials and private analysts were rocked when China recently took an unexpected technological leap, producing a home-grown 5G smartphone chip after foreign supply chains were cut off.
Given China's strengths, the rise of two new democratic supply nodes looks positive for Washington, which since 2017 has been trying to corral allies into its corner to maintain dominance of leading-edge semiconductors. Both Japan and India have their own security contentions with China, influencing economic security policies.
Tokyo is allied with Washington and is suspicious of Beijing's moves toward Taiwan and in the East China Sea. New Delhi administers the world's largest democracy and though politically non-aligned, is China's natural rival for influence across South Asia and has clashed directly with Beijing in the Himalayas and the Bay of Bengal.
Chips with everything
All of which is of intense interest to Ajit Manocha, the Indian-American president and CEO of SEMI, the semiconductor industry's lead trade voice. In a wide-ranging interview with The Washington Times, Mr. Manocha, a 43-year veteran of the industry, recalled he first inspired to enter the sector by a U.S. science-fiction TV series that now doesn't seem all that far-fetched.
"I used to watch 'Knight Rider,' though I thought it was sort of unreal," Mr. Manocha said. "But it is real now: You can tell a car where to take you."
For decades, semiconductors, the central component in digital technologies, fascinated only manufacturers and tech-minded enthusiasts. That changed with Donald Trump's presidency, which identified chips as strategic weapons in a larger economic and political clash with China.
The sector is massive. Last year, according to SEMI data, global revenues were $580 billion. By 2030, Mr. Manocha predicts that figure will almost double, to $1 trillion — meaning the growth of the last 60 years will be replicated within 10 years.
"Semiconductors are central to every industry," he said. "There are a lot of convergences."
Seventy-one major new chipmaking sites have been announced for completion worldwide between 2022 and 2026.
The largest number – 21 – are in China; 16 are in Taiwan; 11 are in the U.S. or Mexico; 10 are in Europe and the Middle East; eight are in Japan; and three each are in Southeast Asia and South Korea.
New technologies are giving high-end chips a central role in the global struggle for economic supremacy. "We used to have a killer app every three to four years," Mr. Manocha said. "Now we have multiple killer apps."
Tech pipelines are already loading up with next-generation 6G and 7G mobile telecommunications, the Internet of Things, autonomous vehicles, autonomous machinery, A1, Quantum computing and "neuromorphics" – the interface between the human brain and digital world.
All generate and consume data, spurring exploding demand for data centers. To service this, Mr. Manocha anticipates another 70-80 semiconductor fabrication plants — known in the industry as "fabs" — breaking ground within a decade, above and beyond the 71 already announced,
That's the good news. But there are risks, including the impact of climate change, the data centers' vast appetite for power sources, plummeting Western scientific and engineering talent and the larger U.S.-China geopolitical rivalry that threatens to "de-couple" the world's two most powerful economies.
Sectoral specialties, strategic competition
Political leaders, seeking chip sovereignty and a dependable source of chips should tensions and trade barriers rise, are bringing fabrication capacity home, Mr. Manocha observed. Countries are in a desperate hunt for competitive advantage.
"Every country can invest. … It's strategic for every country," he said. "But it's a competitive world."
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Summary
The global semiconductor market is shifting with Japan and India emerging as significant manufacturing hubs to counter China's dominance. China, which already supplies half to two-thirds of the low-end chip market, recently made a technological leap by producing a home-grown 5G smartphone chip.