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<ul class="summary-list"><li>The tariffs Donald Trump proposed while campaigning could help create US semiconductor jobs.</li><li>Tariffs could also help US chipmakers compete with companies abroad that sell chips at lower prices.</li></ul>If president-elect Donald Trump follows through on his <a target="_blank" href="https://www.businessinsider.com/companies-raising-prices-trump-tariffs-inflation-goods-getting-more-expensive-2024-11">campaign promise to impose tariffs</a>, the domestic semiconductor industry could see job gains.Industry experts told Business Insider that tariffs on foreign-made chips could help level the playing field for US chipmakers, which are <a target="_blank" class="" href="https://www.businessinsider.com/intel-chip-troubles-problem-us-economy-domestic-production-chips-act-2024-11">facing fierce competition</a> from their counterparts abroad. The tariffs could also encourage US businesses to source more chips domestically and help persuade chipmaking giants, like the Taiwan-based <a target="_blank" href="https://www.businessinsider.com/tsmc-making-apple-iphone-chips-helps-us-semiconductor-bet-2024-10">TSMC</a>, to keep building factories in the US. These developments could aid job growth in the US semiconductor industry, though experts disagreed on how much.Trump's proposed tariff policies include a 60% tariff on goods coming from China and up to a <a target="_blank" class="" href="https://www.businessinsider.com/companies-raising-prices-trump-tariffs-inflation-goods-getting-more-expensive-2024-11">20% tariff</a> on all imports, including chips. US companies source many of the chips needed to power items like iPhones and washing machines from abroad: The US share of overall chip production fell from <a target="_blank" href="https://www.businessinsider.com/why-us-doesnt-make-chips-semiconductor-shortage-2021-4">37%</a> of the world's supply in 1990 to roughly <a target="_blank" href="https://www.whitehouse.gov/briefing-room/statements-releases/2024/08/09/fact-sheet-two-years-after-the-chips-and-science-act-biden-%E2%81%A0harris-administration-celebrates-historic-achievements-in-bringing-semiconductor-supply-chains-home-creating-jobs-supporting-inn/#:~:text=As%20a%20result%20of%20these,Vice%20President%20Harris%20took%20office.">10%</a> today.In an <a target="_blank" href="https://open.spotify.com/episode/0e9ynAH6hmZIIeOx0SaGQu">interview</a> with podcaster Joe Rogan in October, Trump criticized the Biden administration's <a target="_blank" href="https://www.businessinsider.com/intel-chips-act-funding-all-hands-meeting-2024-11">CHIPS Act</a> legislation, which included $52.7 billion in tax breaks and subsidies for companies in the semiconductor industry. He said that the federal government should have implemented tariffs instead to motivate global chipmakers to build more factories in the US, which would then create jobs."You didn't have to put up $0.10," Trump said. "You could have done it with tariffs. You tariff it so high that they will come and build their chip companies for nothing."To be sure, the impacts of a tariff policy on chips could be mixed. Jeff Koch, an analyst at the semiconductor research and consulting firm SemiAnalysis, told BI that tariffs could lead to higher prices for goods containing chips, such as cars, electronics, and appliances. He added that US chipmakers could likely benefit from these tariffs because it could help them compete with companies abroad that sell chips at lower prices.The Trump campaign did not respond to a request for comment.<h2 id="dc733634-a51d-47cf-a7b9-405bdfac9e61">Tariffs on chips could boost construction and manufacturing jobs</h2>Patrick Moorhead, founder, CEO, and chief analyst at the research and advisory firm Moor Insights and Strategy, told BI that tariffs could increase the number of US chip manufacturing jobs. He added that he thinks the policy could incentivize chipmakers like TSMC and Samsung, which is based in South Korea, to boost manufacturing in the US."The cost of manufacturing in the US for Samsung and TSMC would be lower than a 30% to 40% tariff on <a target="_blank" href="https://www.businessinsider.com/quartz-mine-computer-chips-hurricane-helene-spruce-pine-semiconductor-2024-9">wafers</a> and <a target="_blank" href="https://www.businessinsider.com/us-ai-chip-production-manufacturing-nvidia-labor-china-taiwan-korea-2024-4">packaging</a>," he said, referring to key components of the chipmaking process.Jeff Ferry, chief economist at the Coalition for a Prosperous America, a nonprofit that advocates for increasing domestic manufacturing, estimated that tariffs could create roughly 100,000 jobs at US chip manufacturers and their suppliers.He said this estimate was partly based on a <a target="_blank" class="" href="https://www.semiconductors.org/wp-content/uploads/2021/05/2021-Jobs-Report_2-pager.pdf">report</a> published in 2021 by the Semiconductor Industry Association — a trade association and lobbying group — that said a $50 billion investment would help create an estimated 10 additional chip factories in the US. That could add about 42,000 direct jobs at the companies building these factories and 101,500 indirect jobs at chipmakers' suppliers, per the report.Ferry said he thought chip tariffs could lead to the creation of roughly 10 additional factories, which led him to come to the 100,000 jobs estimate. In August, the White House <a target="_blank" href="https://www.whitehouse.gov/briefing-room/statements-releases/2024/08/09/fact-sheet-two-years-after-the-chips-and-science-act-biden-%E2%81%A0harris-administration-celebrates-historic-achievements-in-bringing-semiconductor-supply-chains-home-creating-jobs-supporting-inn/">said</a> that investments supported by CHIPS Act funding would help create 115,000 construction and manufacturing jobs."Tariffs on chips, particularly legacy chips like those used in autos, could successfully shift production back to the US," Ferry said.Samsung did not respond to a request for comment. Intel and TSMC did not respond to a question about what impact a Trump administration tariff policy would have on each company's job creation plans in the US.An Intel spokesperson pointed to a <a target="_blank" href="https://www.intel.com/content/www/us/en/newsroom/news/us-chips-act-intel-direct-funding.html#gs.i5ie0q">press release</a> from March, which said the company's $100 billion investment in the US over the next five years is expected to create more than 10,000 jobs at Intel and nearly 20,000 construction jobs. TSMC pointed to a <a target="_blank" href="https://pr.tsmc.com/english/news/3122">press release</a> from April, that said TSMC's investments in three Arizona chip factories are expected to create roughly 6,000 company jobs, more than 20,000 construction jobs, and tens of thousands of indirect supplier and consumer jobs.Stephen Ezell, the vice president for global innovation policy at the Information Technology and Innovation Foundation, said that the effectiveness of a tariff on chips could be limited, in part because many chips aren't imported <a target="_blank" class="" href="https://www.usitc.gov/publications/332/executive_briefings/ebot_cellular_phones_and_covid.pdf">directly</a> into the US: He said they often come embedded into finished products like <a target="_blank" class="" href="https://www.usitc.gov/publications/332/executive_briefings/ebot_cellular_phones_and_covid.pdf">smartphones</a> or computers.For example, he said that in most cases, chips that TSMC manufactures in Taiwan for Apple are sent to <a target="_blank" class="" href="https://www.theatlantic.com/technology/archive/2022/12/tsmc-apple-memory-chip-production-us-china-taiwan-relations/672593/">China</a> or <a target="_blank" class="" href="https://www.cnbc.com/2024/04/10/apple-made-14-billion-worth-of-iphones-in-india-in-shift-from-china.html">India</a> to be incorporated into a product like an iPhone. Therefore, the chip wouldn't be subject to a US tariff but the iPhone would.When deciding whether to build a chip factory in the US, Ezell said several factors — including wage rates, the labor talent pool, and tax policy — would be bigger considerations for companies than the country's tariff policy. But if tariffs proved to be the deciding factor in a company's decision to invest in the US, then Ezell said the policy could arguably be credited with boosting employment in the semiconductor industry."If a company did decide not to launch a factory elsewhere and instead launch it in the United States, then yes, this dynamic could lead companies to hire more," he said.Do you work in the US semiconductor industry? Reach out to this reporter at <a target="_blank" href="mailto:jzinkula@businessinsider.com">jzinkula@businessinsider.com</a>

Trump's trade restrictions could be good for American semiconductor jobs

<ul class="summary-list"><li>SemiAnalysis has grown from three analysts to 12 experts across five countries in two years.</li><li>The firm provides deep insight into GPUs and AI models and has become essential for major companies.</li></ul>Nvidia CEO Jensen Huang isn't the only one who has gone from uber-nerd to <a target="_blank" class="" href="https://www.businessinsider.com/jensen-huang-signed-womans-chest-tech-conference-nvidia-rockstar-leather-2024-6">tech luminary</a> in the space of a few years. Dylan Patel may be less of a household name, but for those watching Huang's moves closely, Patel's firm SemiAnalysis has become a <a target="_blank" class="" href="https://www.businessinsider.com/nvidia-ai-chip-blackwell-delay-new-annual-product-launch-2024-8">central source</a> of intel.OpenAI cofounder Sam Altman even called him "<a target="_blank" class="" href="https://www.businessinsider.com/google-gemini-ai-model-smashes-gpt4-says-semianalysis-2023-8">that semianalysis guy</a>" in a post on X, formerly Twitter, last year. Patel responded with an edited image of Google CEO Sundar Pichai pouring milk into Altman's mouth while holding him by the hair. Is there any greater sign of tech prowess than a high-profile online feud?SemiAnalysis gets deep into the weeds on graphics processing units, from the <a target="_blank" class="" href="https://www.businessinsider.com/ai-taiwan-china-chip-war-2024-6">base of the supply chain</a> to the end-users building the AI models that require so many specialized chips. That exchange with Altman was just a year ago, but it might as well have been in a different lifetime.In the last two years, SemiAnalysis has grown from a team of three analysts in two countries to a team of 12 subject matter experts in the US, Japan, Singapore, Taiwan, and France."We had some major companies that were customers, but now almost every major company in the AI infrastructure, server, model, space from sub-components all the way through to clouds and hyperscalers have become customers, which is a big shift," Patel told Business Insider.The firm's newsletter, launched in 2020, and its blog have become mandatory reading since they connect the semiconductor industry to the tech it enables in a way few do.News that Nvidia's next chip launch, <a target="_blank" class="" href="https://www.businessinsider.com/nvidia-ai-chip-blackwell-delay-new-annual-product-launch-2024-8">Blackwell, would be delayed</a> stirred up many questions about how AI hardware from the largest player in the game is rolling out. Patel spoke to BI about the impact of the delay, and how to observe Nvidia like a pro.This Q&amp;A has been edited for clarity and length.BI: Where do you get your information?The team consists of people across the entire supply chain, geographically and technically. We have someone who previously worked as low as ASML (Advanced Semiconductor Materials Lithography), the largest equipment company, and then all the way through to companies upstream, such as former employees of Microsoft, Nvidia, etc. So we have the entire view of the supply chain, from manufacturing, up to models. Also, several people on the team are from hedge fund backgrounds.I think the team goes to more than 50 technical conferences across the entire stack — not just the trade shows, which are not really as valuable, but more the technical conferences where people are presenting papers and advancements in the field.When you establish all these research and consulting relationships, you end up with a large well of information. That is how we're able to get disparate pieces of information that may be known and even common in one part of the supply chain but don't spread far outside it. Engineering especially, is very horizontal. Trying to draw the lines between all the different parts of the stack is very important.BI: There was a recent report about Nvidia's next-generation<a target="_blank" href="https://www.businessinsider.com/nvidia-ai-chip-blackwell-delay-new-annual-product-launch-2024-8"> Blackwell chip being delayed</a>. How common is a delay like this in the semi-world?In semiconductor manufacturing, there's this loop of the design being sent to <a target="_blank" class="" href="https://www.businessinsider.com/chip-tsmc-taiwan-semiconductor-trillion-market-cap-nvidia-ai-asml-2024-7">TSMC</a>, which manufactures. Once you have the stencils, it's a multi-month process to produce chips. Then you send those wafers out to customers.Customers test them to make sure everything works. More often than not, it doesn't. Why? Take, for example, a modern iPhone chip. It has 25 billion transistors and 15 layers of metal. Twenty-five billion transistors are 25 billion on-off switches, and they're perfectly timed and organized so that everything you do on your iPhone happens.AI chips are even more complicated than that. It's impossible to perfectly simulate everything, so you are always going to have issues. Then they'll need to make a few modifications to the design and send it back. That has always happened. And the range of modifications can be major to minor.Nvidia has always had an incredibly aggressive timeline. They've always been really good about shipping either the first or second revision of the chip. Whereas, other companies can go through 12 revisions. Even big companies like AMD (Advanced Micro Devices) tend to go through two, or three, or four revisions.The fact that Nvidia wanted to ramp so fast — this Blackwell ramp was supposed to be the first chip with $100 billion in sales — meant there were some minor delays. It's just a few months at most.But because so many people are affected by that delay, it shakes the entire world. In the past, the customers affected by this would know, and it wouldn't shake up all the way to the top levels of every company.BI: What are your favorite non-revenue indicators to watch at Nvidia?One is the size and use of models.Meta releases a new model, and it's now 405 billion parameters, right? These new models continue to increase the demand for compute voraciously. Now that Meta released this new model, and now that everyone uses these open-source models and doesn't develop their own, everyone switches to this bigger, newer model, and that creates a significant increase in demand.On the flip side, all the way downstream, companies in Taiwan have to report their revenue monthly. You can see the exact ramp of everything as soon as you want to see it.So there's a lot of information all the way upstream in terms of the models and deployments, and all the way downstream to the various sub-component suppliers.The other place I like to look a lot is random suppliers that are very small in niche parts of the supply chain, or suppliers of suppliers.Maybe Nvidia suppliers are very hush-hush, but maybe TSMC's suppliers are very open about what TSMC is ordering and you can estimate what's going to happen to Nvidia's production capacity or ability to sell servers from there.BI: Assuming the initial Blackwell rollout will indeed be smaller than promised, what do you know about who gets to be first in line for the new chips? And why do they get to be first in line?How Nvidia decides who gets to be first in line is a very complicated decision matrix — especially now with the <a target="_blank" class="" href="https://www.businessinsider.com/nvidia-mergers-and-acquisition-startup-buying-spree-ftc-investigation-2024-8">investigation by the FTC</a>.There are all sorts of reports that if you purchase their networking equipment, they will push you first in line or similar allegations like that.So, the question is who are they going to prioritize? My sense is that customers who have no choice or are smaller and, therefore need more support from Nvidia would probably be de-prioritized relative to customers who are much larger and have options.For example, Microsoft and Meta are their two largest customers. They also have chip programs internally, but they're not as successful as, say, Amazon and especially Google. But they also went out and bought AMD GPUs. If you're Nvidia, it makes sense to prioritize your biggest customers because they're the ones who are going to purchase the most products. They have a backup plan of <a target="_blank" class="" href="https://www.businessinsider.com/companies-using-ai-bain-survey-roi-2024-6">buying from your competitor</a>, and they require the least support.The calculus around allocations is difficult. But it would make sense that they prioritize their biggest customers, who purchase from other people and may purchase their networking equipment, whereas companies like Amazon don't purchase their networking equipment. You can go down the list and think about why you would provide hardware to one customer over another. Got a tip or an insight to share? Contact Senior Reporter Emma Cosgrove at <a target="_blank" href="mailto:ecosgrove@businessinsider.com">ecosgrove@businessinsider.com</a> or use the secure messaging app Signal: 443-333-9088

How Analyst Dylan Patel gets inside Nvidia to make connections from the semiconductor industry to the tech it enables

Global <keyword id="6451058" type="General" weightage="100" keywordseo="semiconductor" source="Orion">semiconductor</keyword> body <keyword id="21260120" type="General" weightage="20" keywordseo="semi" source="keywords">SEMI</keyword> and its peer <keyword id="20317526" type="General" weightage="20" keywordseo="iesa" source="keywords">IESA</keyword> have announced a strategic agreement to boost the industry ecosystem in <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>, a joint statement said. As part of the agreement, the <keyword id="20764178" type="General" weightage="20" keywordseo="indian-electronics-and-semiconductor-association" source="keywords">Indian Electronics and Semiconductor Association</keyword> (<keyword id="20317526" type="General" weightage="20" keywordseo="iesa" source="keywords">IESA</keyword>) will become part of the SEMI-- the organiser of Semicon events including <keyword id="22843110" type="General" weightage="20" keywordseo="semicon-india" source="keywords">Semicon India</keyword>. "This partnership will help <keyword id="21260120" type="General" weightage="20" keywordseo="semi" source="keywords">SEMI</keyword> grow a strong presence in this critical emerging market and enable both organisations to identify tangible strategies that leverage our combined strengths to enhance supply chain resilience," Ajit Manocha, President and CEO, SEMI said. The agreement was signed on the sidelines of <keyword id="22843110" type="General" weightage="20" keywordseo="semicon-india" source="keywords">Semicon India</keyword> 2024, the statement said on Wednesday. This agreement will also pave the way for joint policy advocacy efforts, with IESA and SEMI working closely with both Central and State governments to drive incentives for product development and manufacturing, leveraging key programmes such as the <keyword id="19952889" type="General" weightage="20" keywordseo="production-linked-incentive" source="keywords">Production Linked Incentive</keyword> (PLI) and Design Linked Incentive (DLI) models, it said. "This milestone is a major win for <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>, SEMI, and IESA. It positions India to become a global <keyword id="6451058" type="General" weightage="100" keywordseo="semiconductor" source="Orion">semiconductor</keyword> powerhouse, accelerates economic growth, and fosters innovation," IESA President Ashok Chandak said.

SEMI, IESA join hands to boost semiconductor ecosystem in India

Chipmaker <keyword id="20004922" type="General" weightage="20" keywordseo="AMD" source="keywords" meta.keywordsubtype="org" meta.entityname="AMD" meta.hostid="261" meta.entityid="AMD">AMD</keyword> is poised to power the surging demand for <keyword id="21517898" type="General" weightage="20" keywordseo="AI-compute" source="keywords">AI compute</keyword> with its wide range of product portfolio, the company's Chief <keyword id="19901571" type="General" weightage="20" keywordseo="technology" source="keywords">Technology</keyword> Officer Mark Papermaster said on Friday. AI compute refers to processing of data using artificial intelligence or machine learning algorithms. Marking 55 years of AMD (Advanced Micro Devices), Papermaster in a blog post looked back on five years of growth and innovations at the company, while also looking ahead to the next five years. He said the future of technology will be born from open ecosystems and deep industry partnerships that drive true innovation. "We're in a unique position to power increased demand for AI compute based on our broad portfolio of compute engines, deep relationships with customers across a diverse set of markets, and open software capabilities. We have a strong foundation of <keyword id="20053383" type="General" weightage="20" keywordseo="data-centre" source="keywords">data centre</keyword> products and customer collaboration across cloud and enterprise, and leadership products for AI PCs," he wrote. He said AMD has shifted from unique product silos to a modular IP portfolio, connected by a single AI software stack for easy deployment, and called it a 'holistic design approach'. "We need to speed our development by using more AI applications in our internal workflows to boost our productivity...We look forward to discovering new methods to optimise efficiency and experiment with new technologies that have potential," he said, adding that AI is poised to become more ubiquitous and consequential than the advent of the Internet. Papermaster further said that AMD will make some 'exciting' announcements at Computex (Taipei), an annual computer exhibition set to be held in June this year. Looking back, he said, "We made the call over a decade ago to leverage our strength and heritage in high-performance computing and invest for the future. Those bets have paid off as all our markets now demand the utmost in compute efficiency (performance per Watt of energy expended), and AI enablement. "...Our growth hasn't come overnight. AMD technology powers the daily lives of billions of people around the world, and in the last five years we've expanded the number of markets we serve." He said that the IT corporation has steadily increased investments in research and development for the past five years to be in line with the growing demand for compute performance and efficiency. "...Our research and development investment has nearly quadrupled, from USD 1.5 billion in 2019, to USD 5.9 billion in 2023, and we plan to continue to invest in developing groundbreaking technologies that show early promise," he said. He added that since 2019, AMD and the <keyword id="20149900" type="General" weightage="20" keywordseo="semiconductor-industry" source="keywords">semiconductor industry</keyword> have grown tremendously. "Global sales of semiconductors grew from USD 412.3 billion in 2019 to USD 574.1 billion in 2022, and are estimated to grow to USD 1 trillion by 2030," he said, adding that AMD is positioned to service the insatiable demand for more computing capacity. He said the company's headcount has more than doubled in the past five years. "Xilinx was the largest semiconductor acquisition when completed in 2022 adding incredible talent, leadership IP, and market expansion to adaptive compute markets with deep customer relationships," he said. Earlier this month, AMD posted its revenue at USD 5.47 billion (about Rs 45.6 crore) for the first quarter of 2024, up 2 per cent against the year-ago period. "AMD started the year strong, delivering record quarterly data centre segment revenue," AMD's EVP, CFO and Treasurer Jean Hu had said. "In addition, we drove solid gross margin expansion. Moving forward, we are well positioned to continue driving revenue growth and margin improvement while investing in the large AI opportunities ahead." 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AMD set to fuel growing demand for AI compute, says CTO

<ul class="summary-list"><li>TSMC has begun producing chips for Apple at its Phoenix fab, people familiar with the matter said.</li><li>This development bodes well for the future of the US semiconductor industry, to which the Biden administration pledged $52 billion.</li></ul>The US's efforts to produce more <a target="_blank" href="https://www.businessinsider.com/us-china-tech-war-computer-chips-semiconductor-plants-costing-americans-2023-1">semiconductor chips</a> have encountered some challenges over the past few years, but the tide may be turning.TSMC, the world's leading chipmaker, has begun producing A16 chips for Apple at one of its <a target="_blank" href="https://www.businessinsider.com/tsmc-phoenix-chip-semiconductor-factory-biden-global-economy-china-taiwan-2022-12">Phoenix semiconductor chip fabs</a> (or factories), two people familiar with the matter told Business Insider. One of the people said that full production levels have not yet been reached. Their identities are known to BI.<a target="_blank" class="" href="https://timculpan.substack.com/p/apple-mobile-processors-are-now-made">Tim Culpan</a>, an independent journalist who covers technology and is based in Taiwan, first reported the news last month.The chips, which Culpan reported are being produced in "small, but significant, numbers," mark a major development for the company, which <a target="_blank" href="https://pr.tsmc.com/english/news/2033">announced</a> plans in 2020 to invest billions of dollars in Arizona and create thousands of jobs. Additionally, it comes two years after Tim Cook, the CEO of Apple, announced that the company would be the "<a target="_blank" href="https://www.businessinsider.com/apple-tim-cook-america-us-made-chips-first-time-decade-2022-12">largest customer</a>" of TSMC's first Arizona fab and use US-made chips for the first time in nearly a decade.A TSMC spokesperson declined to comment on the company's US work with Apple. When asked about the progress on the company's first chip fab, the spokesperson said that the project is "proceeding as planned with good progression," and that the company is on track to be fully operational in the first half of 2025.Apple didn't respond to BI's request for comment.<h2 id="1819bf24-3dc2-49d1-a9d0-42044a61e24c">'A success story'</h2>Dylan Patel, a chief analyst at the semiconductor research and consulting firm SemiAnalysis, said stateside chip production for Apple is a key milestone."Despite many negative stories early on, this shows the fabs are on track and operating as expected — a success story," he told BI.Mark Muro, a senior fellow at the Brookings Institution, told BI that beginning the production of A16 chips — which have been used in some recent <a target="_blank" href="https://www.businessinsider.com/guides/tech/iphone-15-plus-review">iPhone models</a>, though not the new <a target="_blank" class="" href="https://www.businessinsider.com/guides/tech/iphone-16">iPhone 16</a> — is a very positive signal for the Apple-TSMC partnership."It suggests Apple has enough belief in the new US facility to dive right in with US production of one its most advanced mobile processors," he said, adding, "This is encouraging given some observers' skepticism US sites could reach TSMC standards anytime soon."TSMC's commitment to <a target="_blank" href="https://www.businessinsider.com/tsmc-arizona-semiconductor-chip-fab-taiwan-china-president-joe-biden-2024-4">building three</a> chip fabs on its Phoenix campus is key to the Biden-Harris administration's efforts to boost the US's production of the chips that power everything from iPhones to washing machines. In 2022, President Joe Biden signed the <a target="_blank" href="https://www.businessinsider.com/chips-act-bill-to-boost-us-chipmaking-competition-with-china-2022-7">CHIPS Act</a> into law, which included <a target="_blank" href="https://www.businessinsider.com/trump-taiwan-china-semiconductor-chips-us-economy-trade-biden-election-2024-7">$39 billion</a> in manufacturing incentives for chip production in the US. In addition to creating US jobs, the administration hopes to secure supply chains and make the US <a target="_blank" class="" href="https://www.businessinsider.com/asml-tsmc-semiconductor-chip-equipment-kill-switch-china-invade-taiwan-2024-5">less reliant</a> on advanced chips in Taiwan.<h2 id="8f73c768-4752-403c-b6e5-a20430cb553e">TSMC faced construction slowdowns and worker tensions in Arizona</h2>TSMC's investment in Arizona hasn't always been smooth.Last year, TSMC announced that the official opening of its first Arizona fab would be <a target="_blank" href="https://www.businessinsider.com/tsmc-taiwan-semiconductor-phoenix-arizona-factory-chipmaker-job-qualification-debate-2023-8">pushed back</a> from 2024 to 2025. And when the company announced plans to send technicians from Taiwan to train US workers, a local <a target="_blank" class="" href="https://www.businessinsider.com/tsmc-taiwan-semiconductor-phoenix-arizona-factory-chipmaker-job-qualification-debate-2023-8">Arizona labor union</a> protested due to concerns that American jobs would be threatened.Management and safety concerns have also led to some frustrations among TSMC's construction workforce in Arizona. Workers <a target="_blank" href="https://www.businessinsider.com/tsmc-phoenix-arizona-chip-factory-taiwan-semiconductor-management-safety-workers-2023-8">previously told BI</a> that managerial challenges had fueled construction delays, and some have accused the company of <a target="_blank" href="https://www.businessinsider.com/tsmc-phoenix-arizona-chip-factory-taiwan-semiconductor-management-safety-workers-2023-8">safety violations</a>. TSMC <a target="_blank" href="https://www.businessinsider.com/tsmc-phoenix-arizona-chip-factory-taiwan-semiconductor-management-safety-workers-2023-8">previously told BI</a> that it's committed to ensuring that its working conditions are safe.In 2022, TSMC's founder and former CEO Morris Chang told the Brookings Institute that the US's efforts to boost <a target="_blank" href="https://www.businessinsider.com/why-tsmc-chipmaker-investing-billions-us-cost-more-make-chips-2022-12">domestic chip production</a> would be "a wasteful, expensive exercise in futility," citing labor force and cost challenges.Despite these hiccups, TSMC said in April during an earnings call that the progress on its first Arizona fab was "<a target="_blank" href="https://www.businessinsider.com/tsmc-arizona-semiconductor-chip-fab-taiwan-china-president-joe-biden-2024-4">well on track</a>."TSMC's production of Apple chips is good news for Americans <a target="_blank" href="https://www.businessinsider.com/semiconductor-industry-jobs-salary-chips-phoenix-arizona-tsmc-students-2023-10">hoping to land jobs</a> in the industry, Patel said. That's because TSMC's early success suggests it will continue to invest in the US."This drives job growth not just at TSMC but for the entire ecosystem — fab construction, equipment vendors, etc. that are all needed to support the fab," Patel said. "While modern fabs are not especially labor intensive, they require highly-skilled workers and will operate for decades, meaning many high-quality, long-term jobs are being created."TSMC has said that it will <a target="_blank" href="https://www.businessinsider.com/tsmc-arizona-semiconductor-chip-fab-taiwan-china-president-joe-biden-2024-4">charge customers more</a> for chips made outside Taiwan due to higher manufacturing costs. But Patel said he doesn't expect this to have a material impact on the prices of Apple's products."US government subsidies were meant to offset differences in construction and other costs between Taiwan and the US to make the business viable for TSMC," he said, adding, "Neither Apple nor consumers should expect a price difference for these US-produced chips.Going forward, chip makers like TSMC will face another challenge once they're operating at full capacity: <a target="_blank" class="" href="https://www.businessinsider.com/semiconductor-certification-program-chipmaker-manufacturing-jobs-new-career-intel-tsmc-2023-8">finding workers</a>.According to a <a target="_blank" href="https://www.semiconductors.org/america-faces-significant-shortage-of-tech-workers-in-semiconductor-industry-and-throughout-u-s-economy/">report</a> published last year by the Semiconductor Industry Association, the US semiconductor industry faces a worker shortage of 67,000 workers by 2030, including technicians, computer scientists, and engineers. However, Patel said that he doesn't expect labor force challenges to materially impact production at TSMC specifically.Muro was also optimistic. He said he thinks TSMC's production of Apple chips would bode well for the future."This is an important signal that the American drive to re-shore high-quality chipmaking is well founded," he said.Do you work in the semiconductor industry and have a story to tell? Reach out to this reporter at <a target="_blank" href="mailto:jzinkula@businessinsider.com">jzinkula@businessinsider.com</a>.

Apple's Made-in-the-USA chips signal a turnaround for the US' big semiconductor bet

New Delhi: After meeting Prime Minister <keyword id="19895781" type="General" weightage="20" keywordseo="narendra-modi" source="keywords">Narendra Modi</keyword> ahead of the <keyword id="21272963" type="General" weightage="100" keywordseo="semicon-india-2024" source="Orion">Semicon India 2024</keyword> Summit, <keyword id="20137945" type="General" weightage="20" keywordseo="sanjay-mehrotra" source="keywords">Sanjay Mehrotra</keyword>, CEO of Micron, appreciated PM Modi's vision of developing semiconductors in India and said policies set up by him to incentivise semiconductor manufacturing in India are also very exciting. "PM Modi's vision to develop semiconductors in India and make it self-reliant is very exciting. The policies set up by him to incentivise semiconductor manufacturing are equally exciting. This is the perfect time for India to develop semiconductors because opportunities will grow with AI. The best is yet to come," Mehrotra said ahead of SEMICON India 2024 Summit. PM Modi will inaugurate SEMICON India 2024 at India Expo Mart, Greater Noida, Uttar Pradesh, today. Earlier on Tuesday, PM Modi chaired Semiconductor Executives' Roundtable at his residence. During the meeting, the Prime Minister said that their ideas will not only shape their business but also India's future. Mentioning that the coming time will be technology-driven, Prime Minister said semiconductor is the basis of the Digital Age and the day is not far "when the semiconductor industry will be the bedrock for even our basic necessities". The Prime Minister emphasised that democracy and technology together can ensure the welfare of humanity and India is moving ahead on this path recognizing its global responsibility in the semiconductor sector. According to an official release, the Prime Minister talked about the pillars of development which include developing social, digital and physical infrastructure, giving boost to inclusive development, reducing compliance burden and attracting investment in manufacturing and innovations. The meeting was attended by CEOs, Heads and representatives of various organisations including SEMI, Micron, NXP, PSMC, IMEC, Renesas, TEPL, <keyword id="23116584" type="General" weightage="20" keywordseo="tokyo-electron-ltd" source="keywords">Tokyo Electron Ltd</keyword>, Tower, <keyword id="19920144" type="General" weightage="20" keywordseo="synopsys" source="keywords">Synopsys</keyword>, Cadence, Rapidus, Jacobs, JSR, Infineon, Advantest, Teradyne, Applied Materials, Lam Research, Merck, CG Power and Kaynes Technology. Also present in the meeting were Professors from Stanford University, University of California San Diego and IIT Bhubaneswar. SEMICON India 2024 is being organised from 11 to 13 September with the theme "Shaping the Semiconductor Future." The three-day conference will showcase India's semiconductor strategy and policy, which envisions making India a global hub for semiconductors. It will witness the participation of top leadership of global semiconductor giants and will bring together global leaders, companies, and experts of the semiconductor industry. The conference will witness participation of more than 250 exhibitors and 150 speakers.

Semicon India 2024: This is perfect time for India to develop semiconductors, says MICRON CEO Sanjay Mehrotra

<ul class="summary-list"><li>Nvidia's stock has more than doubled since the start of the year.</li><li>However, experts told Business Insider that the chip giant may not always be on the up and up.</li></ul>Riding the AI wave has proven to be lucrative for <a target="_blank" class="" href="https://www.businessinsider.com/cathie-wood-would-have-held-nvidia-if-knew-going-up-2024-7">Nvidia</a>.Nvidia stock prices have <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/nvidia-stock-outlook-investors-selling-ai-artificial-intelligence-bubble-hype-2023-6">more than doubled</a> since the start of the year, and in June, it briefly became the <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/nvidia-stock-price-market-cap-microsoft-most-valuable-company-ai-2024-6?_gl=1*nq7cze*_ga*MzE0NTU5NjEuMTcxNTY0OTc0Nw..*_ga_E21CV80ZCZ*MTcyMjQwNzAyMy4yNDIuMS4xNzIyNDA5MDUwLjU5LjAuMA..">world's most valuable company</a>.But the company is unlikely to climb forever."The semiconductor sector has always been cyclical, so we should assume there will be ups and downs in the future too," said <a target="_blank" class="" href="https://www.businessinsider.com/ai-taiwan-china-chip-war-2024-6">Chris Miller</a>, a history professor at The Fletcher School at Tufts University.Miller, who authored The New York Times bestseller "<a target="_blank" class="" href="https://www.simonandschuster.com/books/Chip-War/Chris-Miller/9781982172008">Chip War: The Fight for the World's Most Critical Technology</a>," told BI that chip giants like Nvidia and TSMC "have benefited immensely from the AI buildout."That, however, may not always be the case, he added."The boom in spending on AI infrastructure has been a major growth driver for the chip industry," Miller said. "If excitement and investment in AI slow, chip industry growth will slow, too."<h2 id="b6128045-fbbc-4390-9793-fae816cd6d09">What is the semiconductor supercycle?</h2>At its core, a semiconductor supercycle simply means that there can be sustained periods of growth and increased demand — one that can last for several years.But that rosy period of growth doesn't last forever. The capital-intensive nature of semiconductor manufacturing, for one, makes it extremely difficult to align supply with demand.And companies that want to meet a sudden uptick in demand must make hefty investments to boost production. While this would certainly raise supply levels, it also risks creating an oversupply if demand dies down.This means that investors could be left hanging if they time the semiconductor supercycle wrongly.For now, the chip industry has found itself buoyed by the <a target="_blank" class="" href="https://www.businessinsider.com/how-much-big-tech-spending-on-ai-investments-2024-7">surge in funding</a> from AI-related investments.That has resulted in a big payday for Nvidia, which has done brisk business with <a target="_blank" class="" href="https://www.businessinsider.com/nvidia-mark-zuckerberg-ai-chips-gpus-meta-2024-2">Meta's Mark Zuckerberg</a> and <a target="_blank" class="" href="https://www.businessinsider.com/tesla-ceo-elon-musk">Tesla's Elon Musk</a>.Zuckerberg even touted Meta's growing stockpile of Nvidia chips in an interview with <a target="_blank" class="" href="https://www.theverge.com/2024/1/18/24042354/mark-zuckerberg-meta-agi-reorg-interview">The Verge</a> in January, adding that he expects the company to own more than 340,000 Nvidia H100 GPUs by the end of 2024.However, some segments in the industry have already seen a slowdown, such as those relating to chips for consumer electronics. In April, chip manufacturer TSMC said it was <a target="_blank" class="" href="https://www.bloomberg.com/news/articles/2024-04-18/tsmc-posts-first-profit-growth-in-a-year-after-global-ai-boom?sref=nfBouUGg">lowering its growth forecasts</a>, citing weak smartphone and personal computer sales.The boom in data center builds has also spurred significant chip demand. If data center investment slows, chip firms could take a hit, Miller said.To be sure, not everyone thinks we are at the peak of the AI-driven supercycle just yet."The rising demand for electricity due to digitalization, AI, and the use of renewable energies are increasing the demand for metal raw materials," Thomas Rupf, chief investment officer at private bank VP Bank Asia, told BI."It is still too early to declare a new super cycle," he said, adding that there are still investment opportunities in areas like industrial metals and mining, both boosted by AI demand.<a target="_blank" class="" href="https://www.ey.com/en_sg/people/josie-ananto">Josie Ananto</a>, a principal at EY-Parthenon's strategy and transactions team, told BI that the growing ubiquity of chips means that demand will be a lot more persistent."The growth of the semiconductor sector is not a hype — it is real," she said. "For example, electric vehicles in the automotive sector, product innovation in life sciences and pharmaceutical sector, consumer recommendation and personalization in the consumer products and retail sector."<h2 id="db60ded9-1262-458a-9178-d6d9653eccbb">Heightened competition will only make things harder for incumbents like Nvidia</h2>Semiconductor supercycle aside, investors may also want to pay attention to the competitive dynamics for chip designers like Nvidia."Nvidia today is the leader in producing chips for AI training and deployment," Miller said. "However, Nvidia's success is already attracting competition."Unlike TSMC, Nvidia designs but doesn't make its own chips. This, Miller added, means that Nvidia is exposed to multiple threats — whether it be from Big Tech players like Meta and Google or startups like Groq."The barrier to entry for chip manufacturing is very high, given the significant capital investment required to open a fabrication plant," EY-Parthenon's Ananto said."For chip design, however, this is an area that is likely ripe for disruption, as more technology companies are investing in chip design capabilities, specifically tailored to their products with faster time to market," she added.<a target="_blank" class="" href="https://www.businessinsider.com/amazon-nvidia-aws-ai-chip-dominance-gpu-trainium-inferentia-2024-5">Amazon</a>, <a target="_blank" class="" href="https://about.fb.com/news/2024/04/introducing-our-next-generation-infrastructure-for-ai/">Meta</a>, and <a target="_blank" class="" href="https://cloud.google.com/blog/products/compute/introducing-googles-new-arm-based-cpu">Google</a> are all designing their own AI chips.And Nvidia isn't standing still, either. In May, Nvidia CEO Jensen Huang said the company would release new chips on a "<a target="_blank" class="" href="https://www.businessinsider.com/nvidia-demand-ai-chips-blackwell-hopper-ceo-jensen-huang-earnings-2024-5">one-year rhythm</a>" instead of its traditional two-year release cycle.But that's not to say that firms will all be competing to feast on the same pie. According to Miller, the pie may be huge now, but there's no telling when it could shrink."The key question is how much Big Tech companies continue to spend building AI infrastructure," he said.According to a <a target="_blank" class="" href="https://www.goldmansachs.com/insights/top-of-mind/gen-ai-too-much-spend-too-little-benefit">Goldman Sachs</a> report published last month, tech companies are expected to <a target="_blank" class="" href="https://www.businessinsider.com/ai-return-investment-disappointing-goldman-sachs-report-2024-6">pour over a trillion dollars into AI</a> over the next few years.However, the investment bank cautioned against being overly optimistic about AI's return on investment, given how "exceptionally expensive" the technology is.

Watch out for the semiconductor supercycle before you start buying stocks like Nvidia

<ul class="summary-list"><li>The United Arab Emirates wants to become an AI leader by 2031.</li><li>It's leveraging its oil wealth to attract new talent and fund new research initiatives.</li></ul>The AI revolution is expanding far beyond Silicon Valley.From the <a target="_blank" class="" href="https://www.businessinsider.com/malta-ai-startups-artificial-intelligence-hub-destination-travel-2024-5">shores of Malta</a> to the streets of Paris, hubs for AI innovation are forming worldwide. And the United Arab Emirates is emerging as a key center in the Middle East.Last week, the UAE made headlines by participating in the most lucrative funding round in Silicon Valley history: the $6.6 billion <a target="_blank" href="https://www.businessinsider.com/openai-investors-latest-funding-round-2024-10">deal closed by OpenAI</a>. The investment was made through MGX, a state-backed technology firm focused on artificial intelligence and semiconductors.The move was part of the UAE's bid to become a global AI leader by 2031 through strategic initiatives, public engagement, and research investment. Last year, the country's wealthiest emirate, Abu Dhabi, launched Falcon — its first open-source large language model.Another indication of the UAE's commitment to AI is its appointment of Omar Sultan Al Olama as the country's AI Minister in 2017.The minister acknowledges that the UAE faces tough competition from powerhouses like the United States and China, where private investment in AI technology in 2023 totaled $67.2 billion and $7.8 billion, respectively, according to Stanford's Center for Human-Centered Artificial Intelligence.So he says he is embracing cooperation over competition."I don't think it's going to be a zero-sum game where it's only going to be AI that's developed in the US, or only going to be AI that's developed in China or the UAE," Al Olama said at an event hosted by the Atlantic Council, a DC think tank, in April. "What is going to happen, I think, is that we're going to have centers and nodes of excellence across the world where there are specific use cases or specific domains where a country or player or a company is doing better than everyone else."The UAE's strengths are evident.It is one of the wealthiest countries in the world, mostly due to its vast oil reserves. The UAE is among the world's 10 largest oil producers, with 96% of that coming from its wealthiest emirate, Abu Dhabi, <a target="_blank" href="https://www.trade.gov/country-commercial-guides/united-arab-emirates-oil-and-gas">according to the International Trade Administration</a>.Abu Dhabi's ruling family also controls several of the world's largest <a target="_blank" href="https://www.businessinsider.com/trump-and-biden-us-should-have-a-sovereign-wealth-fund-2024-9">sovereign wealth funds,</a> including the Abu Dhabi Investment Authority and Mubadala Investment Company, a founding partner of MGX.These funds have been used to diversify the country's oil wealth and could now be diverted to funding new AI companies. AI could contribute $96 billion to the UAE economy by 2030, making up about 13.6% of its GDP, according to a <a target="_blank" href="https://www.pwc.com/m1/en/publications/potential-impact-artificial-intelligence-middle-east.html">report</a> by PwC, the accounting firm.But capital is only part of the equation. The bigger question is whether the tiny Gulf nation can attract the requisite talent to keep up with Silicon Valley.Recent developments show promise. Between 2021 and 2023, the number of AI workers in the UAE quadrupled to 120,000, Al Olama said at the Atlantic Council event. In 2019, it rolled out a 'golden visa' program for IT professionals, making entry easier for AI experts. It's also making the most of its existing talent. In May, Dubai launched the <a target="_blank" href="https://www.wam.ae/article/b39jbfx-hamdan-bin-mohammed-launches-%E2%80%98one-million">world's biggest prompt engineering initiative</a>. Its goal is to upskill 1 million workers over the next three years,Abu Dhabi, meanwhile, has — over the last decade — become a nexus for AI research and education.In 2010, New York University launched a branch in Abu Dhabi that has since developed a focus on AI. And, in 2019, Mohamed bin Zayed University of Artificial Intelligence opened as a "graduate research university dedicated to advancing AI as a global force for good." Professors from the university also helped organize the inaugural <a target="_blank" href="https://ioai-official.org/1st-international-olympiad-in-ai-founders-we-have-a-record-number-of-participating-countries/">International Olympiad in Artificial Intelligence</a> in August, which drew students from over 40 countries worldwide."Abu Dhabi may not directly surpass Silicon Valley, however, it has the potential to become a significant AI hub in its own right," Nancy Gleason, an advisor to leadership on AI at NYU Abu Dhabi and a professor of political science, told Business Insider by email. Its "true strengths lie in the leadership's strategic vision, substantial investments in AI research and compute capacity, and government-led initiatives in industry. The UAE has also made strategic educational investments in higher education like the Mohamed bin Zayed University of Artificial Intelligence and NYU Abu Dhabi."Beyond that, she noted, it's "very nice to live here."

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