What the US Election Could Mean for the Global Chip Market

The 2024 US Presidential Election could have a significant impact on the global chip market.

Already, both candidates have recognised the critical role semiconductors play both within the digital economy and for national security. What’s already clear is that the US will continue to boost its domestic chip manufacturing industry, particularly as it eyes regions like Taiwan who remain successful in developing advanced AI chips.

Taiwan will now be watching the US election closely, particularly after Former President Donald Trump expressed frustration with its chip market on The Joe Rogan Experience podcast. Trump accused Taiwan of ‘stealing America’s chip industry’ and also criticised the US CHIPS Act, suggesting he would impose tariffs on Taiwanese chips if elected again.

Such tariffs would inevitably affect global leaders in chip building, including Taiwan Semiconductor Manufacturing Company (TSMC), whose customers include giants Nvidia and Apple. The US currently buys 92% of its leading-edge chips from TMSC.

Trump vs. Harris 2024: Current state of the US chip market

US President Joe Biden kept chip tariffs from Trump’s presidency after winning the 2020 Presidential election. Likewise, he recently added tariffs worth US$18bn on imports including steel, semiconductors and electric vehicles.

Significantly, Biden imposed regulations on the People’s Republic of China, a current chip leader, to limit investment into Chinese technology sectors. Implemented in 2024, the order increased regulation in Chinese AI, semiconductor and quantum computing sectors that inevitably impacted international business relations.

In addition to this, the US CHIPS Act was drafted to reduce reliance on international chip markets, including US$39bn in tax benefits, loan guarantees and grants to encourage American companies to build new chip manufacturing plants in the US.

Despite this, the country’s semiconductor industry still relies heavily on manufacturing capabilities around the world.

It has also been suggested by Reuters that these export controls are likely to remain in place. Likewise, both candidates are expected to maintain a tough stance on international chip manufacturing, if elected, which could impact the global chip market. 

Trump in particular has called for a ‘resurgence of American manufacturing’ and has suggested implementing high tariffs on foreign-made computer chips. A move like this could potentially disrupt global supply chains and increase consumer costs.

Democratic Presidential candidate and current Vice President Kamala Harris on the other hand is expected to maintain Biden’s chip strategy of restricting advanced semiconductor exports to China. This involved further implementing the CHIPS and Science Act which aims to bolster US semiconductor research, development, manufacturing and workforce development. 

Harris has also stated her intention to build upon this progress and support American leadership in semiconductors.

Ultimately, the election outcome could end up reshaping the global semiconductor landscape, with large implications in the competitive technology landscape and global chip distribution.

AI will keep growing US data centre market

The state of the chip market will inevitably impact the US data centre industry, as AI chips are being used more frequently within facilities to enable more complex workloads. 

As the AI boom continues to surge, US data centres continue to grow, leaving the country to boast the largest market with more than 5,000 data centres. Its influence cannot be overlooked, given that the country is the single largest region for connectivity and cloud in the world today, alongside many technology companies being based there.

As its data centre industry continues to scale to meet demands, alongside its desire to be an AI leader, increasing numbers of developers are building data centres nationwide. 

According to the Financial Times, new data centres totalling nearly 24 gigawatts (GW) were announced by companies in the US during the first half of 2024. This is more than triple the same period last year and already exceeds the whole of 2023, according to Wood Mackenzie.

“A large load like this has never really existed in history,” Chris Seiple, Vice-Chair of Wood Mackenzie’s power and renewables group, tells the Financial Times.

“It’s clear that there is a race going on across America to secure land and interconnection to energy to be able to build as much data centre capacity as possible.”

Make sure you check out the latest edition of Data Centre Magazine and also sign up to our global conference series - Tech & AI LIVE 2024

Data Centre Magazine is a BizClik brand