The Biden administration is embarking on a bold new strategy to reshape the global chip supply chain, with plans to increase semiconductor production in the United States and partner with other countries for final assembly. This initiative, dubbed “chip diplomacy,” aims to enhance economic prosperity and national security while reducing reliance on East Asia for critical technology.
The administration has already secured billions of dollars in foreign investment for semiconductor manufacturing and green energy technology in the U.S. Companies from tech-savvy Asian countries like Japan, South Korea, and Taiwan, as well as European nations, are among those making significant investments. For example, South Korean chipmaker SK Hynix is building a multi-billion-dollar factory in Indiana, creating over 1,000 jobs in the region.
Secretary of State Antony J. Blinken and Commerce Secretary Gina Raimondo are leading efforts to strengthen the chip supply chain and attract foreign investment. The Commerce Department is allocating $50 billion to American companies for chip research and development, while Raimondo has been engaging with foreign governments to discuss additional investments overseas.
Despite challenges such as workforce shortages and competition from East Asian chip factories, the U.S. is projected to increase its share of global chip manufacturing to 14% by 2032. The administration is also employing coercive tactics to prevent China from acquiring American technology, urging countries like Japan and the Netherlands to restrict certain chip-making tools sales to China.
By partnering with countries like Costa Rica, Indonesia, and Vietnam for chip assembly and packaging, the U.S. aims to create a more resilient and diverse supply chain. Job training programs are a key focus of this initiative, with efforts underway to develop partnerships between American and overseas institutions to ensure a skilled workforce.
Overall, the Biden administration’s “chip diplomacy” strategy represents a significant shift in global technology supply chains, with the goal of enhancing U.S. competitiveness and security in the semiconductor industry.
