U.S. President Joe Biden will sign an executive order earlier this month to speed up partnerships with allies such as Japan and South Korea to build chips and other strategically important Chinese-independent chips, the Nikkei reported. product supply chain.
The document will mandate the development of a national supply chain strategy and is expected to make recommendations for supply networks that are less vulnerable to disruptions such as disasters and sanctions from unfriendly countries. A draft obtained by Nikkei said the measures would focus on semiconductors, electric vehicle batteries, rare earth metals and medical products.
The order noted that “working with allies can build strong, resilient supply chains,” suggesting that international relations will be at the heart of the plan. Washington is expected to pursue rare earth partnerships with Taiwan, Japan and South Korea in chip production and in Asia-Pacific economies including Australia.
The United States plans to share information with allies on vital product supply networks and will seek to leverage complementary production. It will consider a framework for quickly sharing these items in an emergency and discuss how to secure inventories and spare manufacturing capacity. Partners may be asked to do less business with China.
The issue has become more pressing due to a shortage of chips this year, which has hit automakers hard.
The U.S. share of global semiconductor manufacturing capacity has plummeted in recent decades, according to the Boston Consulting Group. It was 37% in 1990 and has now dropped to 12%.
Although it has asked Taiwan, the top producer at 22%, to increase production, factories there are already fully operational and there are few options for increasing supply in the short term.
Meanwhile, the Boston Consulting Group predicts that by 2030, China will gain a 24% market share, putting them at the top of the world with the help of some $100 billion in government subsidies worldwide. They argue that over-reliance on China for important products poses security risks.
The United States imports about 80 percent of rare earths from China and relies on the country to produce 90 percent of certain medical products.
Restructuring supply chains can take quite some time, especially in semiconductors. With a limited number of the world’s top chipmakers, these companies have the lead in deciding whether to follow the U.S.’s lead. Doing so will require understanding and cooperation from other governments.
“As far as I know, the U.S. will now conduct an in-depth review of its supply chain to see how much it depends on which country produces semiconductors and rare earths,” the Japanese government source said. “After that, it will eliminate it with allies. countermeasures.”
Washington has begun laying the groundwork, and since last fall has called for economies such as Taiwan, Japan and Australia that have valuable technology or resources to move out of supply chains with China.
Taipei was particularly quick to respond. Senior U.S. and Taiwanese officials signed a memorandum of understanding in November to promote technological cooperation in seven areas, including semiconductors and fifth-generation wireless technology and “safe, secure and reliable supply chains.”
Taiwan Semiconductor Manufacturing Co., the world’s largest chip foundry, agreed last spring to build a manufacturing plant in Arizona, likely to become a symbol of the bilateral relationship. The chipmaker will invest $12 billion in the plant, which will make semiconductors for the military, and is scheduled to start production in 2024. The U.S. government is subsidizing the program.
Since last year, the Ministry of Economy, Trade and Industry of Japan has been working hard to attract TSMC into Japan, not only to establish a stronger three-way supply network, but also to provide Japan with a reliable source of future cutting-edge chips… The Japanese government has budgeted 200 billion yen (19 billion), rolling out the red carpet for the foundry for possible collaborations with Japanese companies.
This appears to be bearing fruit. Nikkei learned this month that TSMC is planning to build a 20 billion yen research and development center in Japan.
In rare earths, the US is working with Australia to work around Chinese dominance. Australian rare earth miner Lynas is building a processing plant in Texas with financial support from the U.S. Department of Defense.
Electric vehicle batteries are another area that needs action, as Panasonic and South Korea’s LG Chem lose out to Chinese rivals.
But in other areas, such as 5G, the new supply chain could become expensive for U.S. and Japanese companies without access to cost-competitive Chinese suppliers like Huawei Technologies.
US congressman: We can’t let China get ahead of us in chip production
Senate Majority Leader Chuck Schumer said on Tuesday he was directing leading Senate Democrats to draft bipartisan legislation to invest in disruptive new technologies to challenge China.
Details are expected to emerge as proposed, but the bill would spend significant amounts of money on recommencing U.S.-made semiconductors, which are at the heart of global shortages and other manufacturing and supply chain vulnerabilities.
“I hope this bill will address the short- and long-term U.S. plans to protect the semiconductor supply chain, and enable our[数据]Storage and other areas stay ahead,” Schumer said. On Tuesday, he added that their goal was to introduce a bipartisan bill this spring.
“We need to get bills like this to the president’s desk quickly to protect America’s long-term economy and national security.”
The move comes as President Biden considers how his administration will compete with China, which faces greater opposition than ever in Washington due to trade records, disputes with neighbors and various arguments. Lawmakers on both sides of the aisle have identified China as the most serious national threat to the United States.
Biden’s campaign platform has called for $300 billion to be invested over four years in research and development of new technologies such as 5G, artificial intelligence, advanced materials and electric vehicles.
At the Senate Armed Services Committee earlier in the day, experts sounded the alarm that the U.S. could be falling behind in developing key technologies, while panelists voiced concerns that the Pentagon is not investing properly to counter China’s dominance in technology. worry.
SASC Chair Dr. Jack Reed noted that China has “actively tried to undercut our current technological edge”, adding: “We must also focus on the strength of our national research and innovation enterprises, including workforce, Health. Manufacturing and industrial base and infrastructure needed to support technology development.”
Schumer co-sponsored a bill with Sen. Todd Young (R. Ind.) to invest $100 billion in research into certain emerging technologies known as the Borderless Act. The bill, which underlies current work, could have created a technology bureau within the NSF, with a “DARPA-like agency” to oversee research and award contracts.
One of the themes of the new bill, Schumer said, will be to strengthen U.S. partnerships and alliances with NATO, Southeast Asian nations and India.
Senate Democrats also want emergency funding from lawmakers to implement a bipartisan semiconductor program included in last year’s defense policy bill.
On Tuesday, Schumer called semiconductors a “dangerous weakness in our economy,” citing reports that automakers have been forced to adjust production schedules because of a shortage of microchips.
“You’ve seen auto plants all over the U.S. shut down because they can’t get chips and can’t rely on foreign processors,” Schumer said. “We can’t let China get ahead of us in chip production.”
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