Many countries are stepping up their competition to solve the problem of chip shortage

The semiconductor shortage problem is plaguing companies around the world, so many countries have increased their investment in semiconductor research and development, and this trend is intensifying.

The latest move comes from the United States. On the evening of May 18 local time, U.S. Senate Democratic leader Chuck Schumer announced a revised $52 billion bipartisan proposal that will significantly boost the production and research and development of U.S. semiconductor chips within five years.

The emergency funding proposal will be included in a more than 1,400-page revised bill being considered by the Senate this week that would allocate a total of $120 billion for basic scientific research and advanced technology research in the United States.

Schumer said the bill includes a "historic $52 billion investment to ensure America remains a leader in chip production."

Supporters of the proposal point out that in 1990, the United States accounted for 37% of semiconductor and microelectronics production, but today only 12% of semiconductors are produced in the United States.

Schumer hopes that the bill will be voted on and passed by the end of this month. Currently, the plan has received full support from both the government and the opposition, and is expected to have a high chance of passing.

In addition to the United States, other countries are also trying to ease the chip crisis, maintain smooth supply chains, and strive to achieve self-sufficiency.

On May 13, South Korea announced an ambitious plan to spend about $450 billion over the next decade to build the world's largest chip manufacturing base, joining China and the United States in a global battle for chip dominance.

South Korean President Moon Jae-in said on the 13th that the government will consolidate its position as the world leader in memory chips and lead the global system chip market to achieve the goal of becoming a comprehensive semiconductor power by 2030.

Meanwhile, the Nikkei reported that Japan plans to increase spending to expand domestic production of advanced semiconductors and batteries as part of its growth agenda this year, highlighting authorities' concerns about a global chip supply shortage.

China has introduced a series of government policies to develop its domestic semiconductor industry, while the European Union said in March that it hopes to have 20% of the world's semiconductors manufactured in Europe by 2030. In 2010, the proportion was just 10%.

At the corporate level, all major chipmakers have announced increased investments. TSMC has pledged to spend $100 billion over three years to increase its production capacity, while Intel plans to invest $20 billion to build two new factories in Arizona. CNBC reported that the two companies have also been discussing building new European factories.

Chinese chipmaker SMIC also said it is working quickly to expand production capacity. On the evening of May 13, SMIC released its first-quarter financial report, with revenue of $1.1036 billion, up 22.0% from the same period last year; net profit of $158.9 million, up 147.6% year-on-year. The company also raised its sales outlook for the first half of this year.

"In the ongoing battle for the technology sector, all countries are vying for this vital position," said Forrester's O'Donnell.

O'Donnell pointed out that it takes about two years to build a chip manufacturing plant, or fab. "Each fab will cost more than $10 billion, but money alone cannot quickly solve the chip shortage problem or guarantee that these countries will immediately take the lead."

In an interview with the media in early May, Intel's new CEO Pat Gelsinger said that the global semiconductor shortage problem that has plagued multiple industries may not be resolved in the next few years.

The latest forecast from market research firm Gartner says the global semiconductor shortage will continue in 2021 and is not expected to return to normal supply levels until the second quarter of 2022.

Zhao Haijun, co-CEO of SMIC, also predicts that the supply and demand imbalance of production capacity will continue until the end of the year, with 40nm and 0.15/0.18μm production capacity being particularly tight.