The US warns of a huge recession if they lose access to semiconductors
There is a reason why the United States is ready to spend so much money on the CHIPS Act: access to semiconductors is critical to the sustainability of any economy and country that aspires to remain one of the greats.
Indeed, we just observed that Russia's sanctions forced it to regress to a technical "Stone Age," as it will be unable to access sophisticated semiconductors.
In recent months, there has been much talk about China opting to attack Taiwan, which would plainly be a tragedy because it would severely limit Western access to semiconductors and increase the chance of a Third World war.
Even if there were no large-scale war, the United States Secretary of Commerce, Gina Raimondo, is clear that the repercussions would be terrible, with the country suffering an immediate and deep recession.
These remarks come at a critical juncture in the United States' efforts to pass the CHIPS Act, a project that has so far received a positive vote in the Senate of 64 to 32. It would be interesting to hear from the 32 senators who voted no and see what choices or alternative solutions they proposed.
Given that 90 percent of the most advanced chips used in the world today are produced by TSMC, a Taiwanese company, and given the importance of semiconductors in the economy and in today's culture, We believe the Secretary of Commerce of the United States' statements make a lot of sense.
We believe that the CHIPS Act will be passed eventually, however it must be approved by both chambers (House of Representatives and Senate).
If the United States decides to continue delaying or repealing the CHIPS Act, it will essentially be shooting itself in the foot. Given the current scenario and the economic and sectoral trends, the relevance of semiconductors will only expand in the next years, therefore ensuring access to them is critical for any power.
As a result, We believe Europe should increase its spending in this area.
Post by Bryan C.
