Schmidt, who co-authored an editorial with Harvard University Professor Graham Allison for the Wall Street Journal, says if TSMC's capacity goes offline — or if it falls into China's control — the U.S. technology sector will likely experience a severe impact.
If Congress passes the "U.S. Innovation and Competition Act," which includes a $50 billion investment in domestic chip manufacturing, the U.S. would still be spending only one-third of what China plans to spend, the authors explained.
China is also expected to leapfrog Taiwan as the world's biggest chip manufacturer by 2025. The country also makes more than half of the circuit boards for installing chips in devices and controls critical raw materials (silicon, gallium and tungsten) used for semiconductor fabrication.
Related Link: 8 Stock Picks To Play The 2022 Emerging Trends Shaping The Semiconductor Industry
3-Pronged Strategy: Schmidt and Allison describe a three-pronged strategy to offset the competition.
The iShares Semiconductor ETF (SOXX) opened Tuesday's session at $361.51, and was up 3.47% at the time of publication.
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