The CHIPS and Science Act provides incentives for domestic semiconductor manufacturing. It also includes more than $50 billion in funding and additional investment in the National Science Foundation, the Department of Commerce and the National Institute of Standards and Technology. China has long been a dominant force in tech manufacturing, with companies such as Apple, Google and Microsoft relying on it.

China has also rapidly gained groundin the semiconductor market. China's semiconductor sales grew more than 30% in 2020 to reach nearly $40 billion. US restrictions on some of its biggest semiconductor companies are likely a function of China's focus on its domestic manufacturing.

The Covid-19 pandemic caused a global shortfall in chip supply, with matters made worse by China's stringent lockdowns. Multiple regions are now rethinking their approach to the industry in order to become more self-sufficient and reduce exposure to Chinese manufacturing. US Treasury Secretary Janet Yellen has repeatedly touted the importance of "friend-shoring"

China continues to try to grow its semiconductor industry as part of a five-year plan announced last year. European legislators, meanwhile, have proposed investments worth tens of billions of dollars over the coming years. However, being completely self sufficient in chipmaking is easier said than done because of the layers of technology and specialized expertise involved.

Taiwan has become a diplomatic and military flashpoint between Washington and Beijing. China's Communist Party views Taiwan as its own territory despite never having controlled the island. Taiwan is critical to the global semiconductor industry, with several of the world's top manufacturers headquartered there, including Apple suppliers Foxconn.
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