Industrial Policy and the Global Semiconductor Sector
Penny Goldberg, Réka Juhász, Nathan Lane, Guilia Lo Forte, and Jeff Thurk
This paper documents and quantifies the magnitude of industrial policies in the global semiconductor sector since the passage of the CHIPS Act in the United States. We provide a comprehensive examination of semiconductor industrial policies globally, their rationale, and their potential economic impacts including cross-border effects.
Abstract
This paper documents and quantifies the magnitude of industrial policies in the global semiconductor sector since the passage of the CHIPS Act in the United States. We catalogue the universe of semiconductor policies announced since 2020, develop a methodology to quantify their financial magnitude, and examine their stated objectives. We find that governments have committed over $400 billion in semiconductor subsidies globally, with the largest programs in China, the United States, and the European Union. We analyze the economic rationale for these policies, including national security concerns, supply chain resilience, and technological leadership goals. Using a quantitative trade model, we assess the potential impacts of these policies on global semiconductor production, prices, and welfare.