This report raises critical points about the future of the semiconductor industry. With rising U.S.-China economic tensions, can the U.S. realistically reclaim its semiconductor manufacturing leadership? The CHIPS and Science Act, which allocates $52 billion to boost domestic production, is a bold move, but is it enough to compete with China, especially when companies like SMIC are adeptly navigating the semiconductor embargoes? What’s particularly intriguing is the microeconomic perspective: if major semiconductor companies choose to limit exports of their most advanced chips to a massive market like China, how can they still achieve financial success? This strategy may lead to short-term losses, but perhaps they’re betting on long-term gains in market positioning and securing contracts in allied nations. Meanwhile, countries like India are capitalizing on this shift, with a 180% increase in semiconductor FDI, positioning themselves as viable alternatives to China. This raises important questions: How will U.S. companies adapt to intense competition? Can prioritizing domestic manufacturing effectively counter the growing capabilities of Chinese firms? The future of the semiconductor sector will hinge on strategic innovation and collaboration. I’m excited to see how this unfolds! #Semiconductors #CHIPSAct #USChinaTensions #Geopolitics #Lazard #Innovation #SMIC
Geopolitics is becoming central to patterns of trade and investment. Growing tensions between China and the West now mean that geopolitical closeness has a bigger influence over where capital is invested than geopolitical proximity. In other words, how countries get along is becoming increasingly important to global trade and finance than where they are located. Learn more about nations leveraging geopolitical cooperation as investment alternatives to China in Lazard Geopolitical Advisory’s 2024 Geopolitics of Supply Chains report: https://lnkd.in/e95TdvbZ
