Wrong Solution to Phantom China Tech Threat

US and EU authorities have called the current semiconductor supply chain crisis a major national and economic security risk, citing a “dangerous” over-dependence on Asian foundries to source state-of-the-art chips.

In a purported effort to address the crisis, the US Senate in June passed the CHIPS Act that calls for $50 billion in subsidies to the US semiconductor industry (the bill has stalled in the House for the time being).  The EU, meanwhile, plans to spend as much as 145 billion Euros to build out a more comprehensive chip manufacturing ecosystem in Europe to produce the most advanced microchips. 

Semiconductors are critical to the global economy, and disruptions in the supply chain have exposed vulnerabilities, but US and EU politicians have mis-diagnosed the cause of the problems, and experts argue that the private…