Last month, the US House of Representatives introduced the Semiconductor Technology Advancement and Research (STAR) Act, 2024.
The legislation represents the latest attempt by US officials to rescue their chip manufacturing industry and compete with China. The act introduces a 25% tax relief for companies engaging in chip design in the US.
The chip manufacturing industry represents a key point of conflict in the ongoing competition between the United States and China.
The US has been placing sanctions on China’s domestic industry for some years now, most notably a 2019 ban on the delivery of goods and services from US companies to Chinese competitor Huawai. Just last year, the Biden administration placed sanctions restricting outbound investment in Chinese semiconductor, quantum information and AI technology sectors.
The industrial strategy according to the Chinese government is one of development of “self-reliance” in the technological sphere.
Recently it was reported that stock of semiconductor equipment manufacturer ASML had dropped by around 10%. This was due to comments made in a US Government Report which stated that sanctions would have to be placed on the company’s business with China.
Further comments have been made by former US president Donald Trump about ramping up the US trade war on China if he is elected in November’s election.
This protectionism on the behalf of the US monopolists seeks to consolidate the domestic industry on behalf of the Silicon Valley tech monopolies, which hold significant weight in the American industrial landscape.
A report from the Semiconductor Industry Association released in May which projects a 203% growth of the US chip manufacturing industry by 2032. Of course these have been backed up by investments and subsidies of over $50B at a time from the US government in recent months and years.
The great technological advancements of our age are coloured by sharp competition between various monopolists and companies, with the US monopolists at the forefront, dictating via economic warfare and using sanctions at their behest.
What this represents is a key characteristic of imperialism, and the sharp concentration of industrial capital into the hands of a small few.
As these inter-monopolist contradictions increase, we see more and more negative consequences for workers: companies sacking hundreds of workers at a time, stagnant wages, and even stagnated technological development. But in the development of monopoly capitalism the seeds of socialism are sown. Industry is concentrated, therefore production can become ever the more socialised, and the planning of production becomes even simpler.
As Lenin said:
The capitalists will sell us the rope with which we will hang them