Reva Goujon, an analyst at the Rhodium Group, and JP Kleinhans from SNV join Jay Goldberg of Digits and Dollars and Dylan Patel of SemiAnalysis for a riveting discussion. They delve into the CHIPS Act's funding priorities, revealing its impact on major semiconductor firms. The group also explores the existential implications of AI on global power dynamics and the rising risk of a tech 'splinternet.' Additionally, they examine the geopolitical tensions between the U.S. and China and how these dynamics shape the future of technological innovation.
The CHIPS Act's funding priorities focus on leading-edge semiconductor technologies, opening room for strategic deals and partnerships.
Contrasting views on the CHIPS Act document highlight policy versus technology-focused perceptions and discussions on strategic decision-making.
Restrictions on joint research and technology licensing with foreign entities under the CHIPS Act signal a shift towards national security and economic objectives alignment, impacting industry operations.
Deep dives
Chip's Act Funding Priorities
The Chip's Act released guidelines for industry players seeking funding in the US semiconductor manufacturing sector. The focus appeared to lean towards leading-edge technology and advanced packaging, with less emphasis on traditional packaging and trailing-edge process technology. The document outlined national security and economic objectives without specifying exact allocation percentages, leaving room for negotiation and potential strategic deals.
Policy vs. Technology Document
There were contrasting views on the Chip's Act document, with some perceiving it as a policy document rather than a technology-focused one. The prioritization of leading-edge technologies led to strategic considerations and potential negotiation dynamics with industry giants like TSMC and Intel. The document's broad guidelines sparked discussions on the balance between policy objectives and strategic decision-making.
Implications of Funding Conditions
The Chip's Act funding came with conditions dictating restrictions on joint research and technology licensing with foreign entities raising national security concerns. Companies like Samsung and SK Hynix faced challenges due to such conditions, impacting their operations in China. The provisions signaled a shift towards imposing conditions on industry players to align with national security and economic objectives, raising caution among firms.
European Approach and Industrial Policy
European engagements with China navigated complexities related to semiconductors and industrial policy. Discussions expanded beyond technology to include policy considerations around subsidies and strategic technology picks. The contrast between US and EU approaches highlighted varying strategies towards technology partnerships, industrial espionage, and geopolitical balancing amidst escalating global tensions.
Future Prospects and Strategic Shifts
The evolving landscape of semiconductor control policies suggested potential future shifts in technology access and deployment across regions. Considerations around generative AI, semiconductor manufacturing, and data security indicated intricate challenges for market players. Strategic decisions on technology deployments, supply chain diversification, and industrial partnerships reflected broader geopolitical and economic implications.
Global Tech Competition and Tech Governance
The global tech competition set the stage for complex dynamics between leading players like the US, China, and Europe. The intersection of technology governance, economic security, and national interests highlighted strategic challenges for industry stakeholders. The evolving landscape of AI, semiconductor policies, and data security underscored the need for robust governance frameworks to navigate complex geopolitical and economic landscapes.
Deep dive into the CHIPS Act's recent Notice of Funding Opportunity (NOFO);
Discuss the potentially existential impact of AI on global power dynamics;
Consider the true intentions of the October 2022 export controls — from military constraining China to crippling manufacturing in the broader economy;
Muse about the potential for a "splinternet" to emerge as countries around the world — in particular, the US, China, EU members states — adopt different standards and regulations for their tech industries;
