Global chip battle intensifies with $81 billion subsidy surge

Superpowers led by the US and European Union have funneled nearly $81 billion toward cranking out the next generation of semiconductors, escalating a global showdown with China for chip supremacy.

It's the first wave of close to $380 billion earmarked by governments worldwide for companies like Intel Corp.

and Taiwan Semiconductor Manufacturing Co. to boost production of more powerful microprocessors. The surge has pushed the Washington-led rivalry with Beijing over cutting-edge technology to a critical turning point that will shape the future of the global economy. What began as concern over China's rapid advances in key electronics blossomed into a full-scale panic during the pandemic, as chip shortages highlighted the importance of these tiny devices to economic security. At stake now is everything from the revitalisation of US tech manufacturing to the assertion. Chips spending by the US and its allies marks a new challenge to Beijing's decades of industrial policy — albeit one that will take years to bear fruit.

The rush of funding has hardened battle lines in the US-China trade war. It's also giving a lifeline to Intel, the one-time global leader in chip manufacturing that in recent years has lost ground to rivals including Nvidia and TSMC.