Skip to main content

Biden invests in semiconductor production in the US

by Futures Centre, Aug 22
2 minutes read

Whilst the Inflation Reduction Act steals the headline, this month President Biden also signed a $280 billion legislative package which contained more than $50 billion to support US chip production. The package includes around $39 billion in manufacturing incentives, with other funding streams available for research and design for example. It also includes stipulations around worker and community investments and includes opportunities for small businesses and disadvantaged communities.

So what?

After months of shortages in the production of semiconductor chips used across games consoles to mobile phones to electric cards, the US government has moved to reduce reliance on manufacturers in South-East Asia, specifically China and Taiwan. Chip suppliers such as Micron have already responded with renewed investment plans of their own. The move is the latest indicator of a trend of onshoring or nearshoring, which brings elements of supply chains closer to the market they will be consumed. The trend is a reverse of the market dynamic of labor and manufacturing shifting from high to low-cost regions (typically from Western markets to the “Global South”) over the 20th and 21st centuries.

It is also a signal of how supply chain disruptions, whether due to climate, health crises, or conflict, are expected to continue into the future. However, chip manufacturing and shipping are among the final steps in a supply chain that is dizzyingly complex and diverse. Production requires a wide range of highly unique and specific parts, raw materials, and other elements currently sourced across the globe. Whether this can be replicated in a single country setting remains to be seen.

Sources

Details

by Futures Centre Spotted 1933 signals

Have you spotted a signal of change?

Register to receive the latest from the Futures Centre.
Sign up

  • 0
  • Share

Join discussion

Related signals

Our use of cookies

We use necessary cookies to make our site work. We'd also like to set optional analytics cookies to help us improve it. We won't set optional cookies unless you enable them. Using this tool will set a cookie on your device to remember your preferences.

For more detailed information about the cookies we use, see our Cookies page.

Necessary cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.

Analytics cookies

We'd like to set Google Analytics cookies to help us to improve our website by collecting and reporting information on how you use it. The cookies collect information in a way that does not directly identify anyone. For more information on how these cookies work, please see our 'Cookies page'.

>