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Experts Urge U.S. to Boost Domestic Semiconductor Production to Strengthen AI Capabilities

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05/06/2024
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Experts Urge U.S. to Boost Domestic Semiconductor Production to Strengthen AI Capabilities

by Geraldine S.
05/06/2024
in Artificial Intelligence in Trade, Industry

Industry experts are emphasizing the importance of onshoring semiconductor production to maintain the United States’ competitive edge in artificial intelligence (AI) development. Jonathan Klamkin, CEO of semiconductor firm Aeluma, highlighted in an interview the integral role of manufacturing in fostering innovation across the supply chain. Klamkin explained that innovation is not just about designing software and chips; it involves the entire production process. “When you innovate across the supply chain, you innovate the manufacturing equipment, how to operate the facilities, and the design of the chips themselves,” Klamkin stated. He emphasized the need for the U.S. to achieve vertical integration in the semiconductor industry.

The U.S. is currently facing stiff competition from global rivals in securing the advanced chips necessary for AI research and development. The surge in AI interest has significantly increased the demand for these chips, evidenced by Nvidia’s 206% revenue increase over the previous year. According to the Semiconductor Industry Association (SIA), global chip sales are expected to jump 13.1% to $595.3 billion this year. Internationally, countries like the United Kingdom are investing heavily in semiconductor technology to support their AI industries, reflecting the global race to lead in this strategic area. The U.S.’s share of global advanced semiconductor production has declined from 37% in the 1990s to 12% post the 2022 CHIPS Act.

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In contrast, Taiwan remains a major producer, and China is rapidly expanding its manufacturing capabilities. “I’m not saying we need to make 100% of those chips, but maybe the number should be 30 or 40%,” Klamkin suggested, underscoring the strategic importance of increasing domestic production not just for supply chain security but also for national security. The CHIPS Act represents a significant move towards bolstering U.S. capabilities in chip manufacturing, aiming to increase innovation and technological development within the country. In addition, OpenAI CEO Sam Altman is actively seeking investments to scale chip production, which he believes is crucial for advancing global AI technology. Recent reports indicate Altman has engaged with investors and chipmakers, including discussions with prominent figures and companies in the industry, to fund these ambitious projects.

Stay current with supply chain report news at The Supply Chain Report. For international trade resources, visit ADAMftd.com.

#USAIAdvancementNews #GlobalCompetitiveness #EconomicStrategyNews #SupplyChainNews #NationalSecurity

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