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Shortages of semiconductors are battering automakers and tech giants, raising alarm bells from Washington to Brussels to Beijing. The crunch has raised a fundamental question for policymakers, customers, and investors: Why can’t we just make more chips?
There is both a simple answer and a complicated one. The simple version is that making chips is incredibly difficult—and getting tougher.
“It’s not rocket science—it’s much more difficult,” goes one of the industry’s inside jokes.
The more complicated answer is that it takes years to build semiconductor fabrication facilities and billions of dollars—and even then the economics are so brutal that you can lose out if your manufacturing expertise is a fraction behind the competition. Former Intel Corp. boss Craig Barrett called his company’s microprocessors the most complicated devices ever made by man.
This is why countries face such difficulty in achieving semiconductor self-sufficiency. China has called chip independence a top national priority in its latest five-year plan, while U.S. President Joe Biden has vowed to build a secure American supply chain by reviving domestic manufacturing. Even the European Union is mulling measures to make its own chips. But success is anything but assured.
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A robot arm feeds silicon wafers into a chipmaking machine. Video: Adam Glanzman/Bloomberg
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