If production and manufacturing of semiconductor chips and processors remains overseas, the United States will suffer in the race to lead in artificial intelligence (AI) development, industry experts say.
“If you’re not making things, you’re just designing software, maybe just designing chips, but if they’re fully built and packaged somewhere else, literally people “You can’t innovate as much when you’re in the hands of someone who’s making some of these technologies,” Jonathan Crumkin, CEO of semiconductor company Aelma, told Fox News Digital. Ta.
“We’re going to innovate throughout the supply chain, we’re going to innovate the manufacturing equipment that goes into the pads, we’re going to innovate how the pads operate, we’re going to innovate the design of the chips,” Krumkin said. “America needs vertical integration in semiconductors. You can’t just design chips and write software code.”
The United States faces competition from rival countries to possess the types of chips needed for research and development of AI models. Along with mainstream interest in AI models and platforms, demand for semiconductor chips and microprocessors has skyrocketed.
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chip manufacturer Nvidia’s revenue increased 206% There was a year-over-year increase in the latest quarter due to a surge in interest and demand for AI.
Silicon wafers are seen at the GlobalFoundries semiconductor manufacturing plant in Dresden, Germany, on February 11, 2021. (Lisa Johansen-Kopitz/Bloomberg via Getty Images)
The Semiconductor Industry Association (SIA) expects global chip sales to increase 13.1% this year to $595.3 billion, but sales in 2023 will decline by about 8%.
The UK, for example, has committed to spending hundreds of millions of pounds on chips to enable researchers and developers to pursue breakthroughs and remain at the cutting edge of the industry as countries vie for a leading role in AI. promised.
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Tight supply coupled with high demand is prompting countries to seek simpler chips to fill the gap in more sophisticated chips and spurring stockpiling efforts among companies.
Gregory C. Allen, director of the Wadhwani Center for AI and Advanced Technologies at the Center for Strategic and International Studies, previously told Fox News Digital that AI is “the hottest category in the global venture capital market and technology investment.” He said there is.
Workers make chips for phones, cars and LED lighting in Huai’an, China, April 29, 2024. (Costfoto/NurPhoto via Getty Images)
“Many different companies have been founded to pursue AI technology, and so many big tech giants are building their companies around AI technology, especially after recent breakthroughs in generative AI and underlying models. “We’re trying to reinvent it,” Allen said.
Part of the problem stems from the fact that the United States does not produce much of the world’s chip supply. At the time of passage of her CHIPS Act in 2022, the United States was producing her 12% of advanced chips, compared to 37% in the 1990s. Taiwan produces the majority of advanced chips, but China is looking to rapidly expand its manufacturing capacity.
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“I’m not saying we need to manufacture 100% of these chips, but perhaps that number should be 30% or 40%,” Krumkin said. “So, that’s what the CHIPS Act is doing, and I think that’s a good thing. It’s about supply chains and national security, but it’s also about more technology innovation and invention happening in the United States. That’s a big thing.
“In my experience, what has happened in the semiconductor industry in the past is that governments have made seemingly very ambitious investments,” Krumkin said. “Sometimes they invested in the short term and expected it to last right away, but it didn’t.”
Sam Altman, CEO of OpenAI (Patrick T. Fallon/AFP via Getty Images)
“So, you could argue, was it a good investment? Maybe some development took place and some of the technology could have been commercialized, but it was a very ambitious goal. ,” he said.
OpenAI CEO Sam Altman appointed in February Courting more investors The Wall Street Journal reports that trillions of dollars are needed to scale up chip production. Altman’s plan aims to transform global manufacturing and accelerate the development of advanced AI.
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In recent weeks, Altman has met with investors in the United Arab Emirates and the CEO of SoftBank about financing the project, and has also held discussions with chipmakers including Taiwan Semiconductor Manufacturing Co., the report said.
