In the global chip market in 2023, U.S. companies occupy nearly half of the market share, an achievement largely due to their leading position in key areas such as CPUs, GPUs, and SoCs. With top companies like Intel, AMD, Nvidia, Qualcomm, Apple and others based in the United States, there's no doubt about America's leadership in chip design and innovation.
However, a growing problem is the actual manufacturing process of chips. Although the United States is leading in chip design, it is relatively weak in chip production capacity, accounting for only about 10% of global production capacity. More than 80% of U.S.-designed chips need to be produced overseas, with a large portion taking place in places like Chinese mainland, Taiwan, Singapore and South Korea. In particular, the manufacturing capacity of China (including Chinese mainland, Taiwan, and Hong Kong) accounts for about 60% of the total chip production in the United States.
This reliance on external manufacturing has prompted the United States to take steps to try to revive domestic chip manufacturing, including strategies such as the introduction of a $53 billion chip subsidy package. However, despite such policy support, the progress of key projects such as TSMC's factory in Arizona and Intel's expansion plan is still unsatisfactory, and there is uncertainty about whether it will be able to start production on schedule.
The industry generally believes that due to the complexity of chip manufacturing, the United States faces major challenges to complete self-sufficiency. Chip production is not only technically demanding, but also a labor-intensive and capital-intensive industry, which requires the support of a huge industrial chain. China has unique advantages in this regard, including vast land resources, abundant electricity and water resources, an efficient workforce, and the world's most complete industrial system. Together, these factors contribute to China's low cost and high efficiency in chip manufacturing.
These advantages of China include not only low production costs and efficient production capacity, but also its perfect ** chain and market size, which make China the center of global chip manufacturing. Therefore, although the United States has spared no effort in increasing domestic chip production capacity, it is unlikely to change this pattern in the short term. The global success of U.S. chip companies has so far relied on the manufacturing capabilities of countries such as China.
This globalized industrial layout reflects the international division of labor and the realities of the global market, while also highlighting the interdependence of countries at the technological, economic and policy levels. For the United States, how to balance its leading edge in the field of chip design with its external dependence in the field of manufacturing is an important strategic consideration in the future. In addition, with the changes in the global economic and technological environment, how to ensure the security and stability of the chip chain is also a common challenge faced by the United States and the global chip industry. Kunpeng Project