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US-China techno-economic rivalry

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Washington DC, 10 February 2024 (TDI): The US-China techno-economic rivalry is deepening. On Friday, the White House announced the US government plan to spend $11 billion on semiconductor-related research and development programs.

In addition, the government announced that it is launching a $5 billion National Semiconductor Technology Center.

US President Joe Biden wrote, “America invented the semiconductor. It’s time to bring manufacturing and the jobs that come with it – home”.

“My administration is investing $5 billion in microchip research, development, and workforce as part of the implementation of our Chips and Science Act”, he further added.

In 2022, Congress approved the Chips and Science Act which provides $52.7 billion for semiconductor production. Furthermore, it includes $39 billion in subsidies along with $11 billion for research and development.

Moreover, it creates a 25% investment tax credit for building chip plants which is estimated worth $24 billion.

US-China chip war

Reportedly, the chip war between the US and China has become an integral part of their competitive and dynamic relationship. The Biden Administration seeks to regulate Artificial Intelligence (AI), manage data, and secure technological advantage over China.

Also Read: Global semiconductor chip shortage worsens

Moreover, from 2022 to 2023, strong legislative reforms were introduced to maintain US dominance in chip manufacturing and related supply chains. According to reports, the US invented the semiconductor but today produces only about 10 percent of the world’s supplies.

Furthermore, China calls for developing a domestic system to avoid external reliance on new and emerging technologies.

The US investment in Chinese entitles three sectors; semiconductors and microelectronics, quantum information technologies, and certain artificial intelligence systems. However, the US aims at limiting exchanges of not just the people but capital as well.

The US-China techno-economic rivalry has come to a pivotal point where the US introduced sweeping export controls to restrict China’s ability to buy or build sophisticated computer processors.

Hamail Tahir
Hamail Tahir
A student of MPhil in Strategic Studies at National Defence University Islamabad (NDU). She is eager to understand the global changing dynamics and how states use their national interests to acquire regional hegemony. Her focus primarily lies in diplomatic and strategic initiatives during peace and conflict paradigms and can be reached at hamail.tahir@gmail.com

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