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🇰🇷 South Korea /Economy & Trade

Trump's 'Invisible Hand' Guides Chipmakers Toward Self-Sufficiency

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • The Trump administration is increasing government intervention in the semiconductor industry, moving beyond subsidies to direct involvement in corporate decisions and partnerships.
  • This approach, which includes the government taking an equity stake in Intel and brokering deals with major tech companies, resembles China's state-capitalist model.
  • The policy aims to boost domestic semiconductor self-sufficiency to 50% within the term, driven by national security concerns and competition with China.

The Trump administration is adopting an unprecedented level of government intervention in the U.S. semiconductor industry, a departure from traditional free-market capitalism. This strategy involves not just financial support but also direct engagement in corporate decision-making, a move drawing comparisons to China's state-led economic model.

Finally, Apple is going to be working with Intel to build the chips in the United States.

— Donald TrumpTrump announced Apple's collaboration with Intel on social media.

In a significant shift, the U.S. government took an 8.9 billion dollar stake in Intel last year, becoming its largest shareholder. This intervention extends to brokering partnerships, with reports indicating that Commerce Secretary Howard Lutterman pressured tech leaders like Jensen Huang of Nvidia, Elon Musk of SpaceX, and Tim Cook of Apple to collaborate with Intel. This level of government involvement in private business decisions is a stark contrast to the Biden administration's approach, which focused on subsidies and tax credits under the CHIPS Act.

Trump has set an ambitious goal to increase domestic semiconductor self-sufficiency to 50% during his term, a target reminiscent of China's "Made in China 2025" initiative. This aggressive push is fueled by a heightened sense of national security, particularly concerning China's growing technological and military power. The U.S. reliance on Taiwan's TSMC for 90% of its semiconductor manufacturing, coupled with Taiwan's geopolitical risks, amplifies this urgency.

Hundreds of Taiwanese companies will come to the United States. We will build a huge semiconductor industrial complex in the United States.

— Howard LuttermanLutterman described plans for a large semiconductor industrial complex in the U.S. involving Taiwanese companies.

Beyond semiconductors, the administration is extending this control to other strategic sectors like critical minerals and nuclear energy. The Defense Department has invested in rare earth producers, and the Commerce Department has secured options to acquire stakes in nuclear power companies. This trend of increased state control over private enterprise is seen by some as a global wave of "nationalization," driven by geopolitical instability and market disruptions, echoing patterns seen in the 1930s, post-WWII, and during the 1970s energy crisis.

Geopolitical instability, commodity market turmoil, and the development of renewable energy are fueling a wave of nationalization.

— Nicholas MulderMulder, a Cornell University professor, described the global trend of nationalization.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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