The US and EU have invested a combined $81 billion in semiconductor production to compete with China's growing dominance in the sector, as part of a global $380 billion government investment effort.

The investment surge aims to boost domestic chip manufacturing, enhance economic security, and create jobs, with the US allocating $39 billion in grants and the EU committing $46.3 billion, highlighting significant projects in Germany.

Global chip shortages during the pandemic have intensified the focus on semiconductor production as critical to economic stability and national security.

China is significantly expanding its semiconductor production, with more plants under construction than anywhere else and over $142 billion in estimated government funding, despite US export controls aimed at slowing its progress.

Worries about overproduction loom as governments heavily invest in the semiconductor industry, while geopolitical tensions rise with the risk of a Chinese invasion of Taiwan, a key player in advanced chip supply.

The US-China rivalry extends beyond current leadership, with the semiconductor competition having broad implications for global technological supremacy, international trade, and control of strategic technologies.