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Chips’ Political Moment Will Need to Last

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Still, the prospect for increased government largess to augment growing investments from within the industry has resonated with investors. The PHLX Semiconductor Index has been the best-performing tech subsector so far this year, rising nearly 10% relative to the Nasdaq’s 3.7% gain. The 10 stocks on that index specializing in chip-manufacturing equipment have averaged a gain of 20% in that time. Applied Materials , AMAT -3.89% the largest chip-equipment maker by annual revenue, has seen its share price jump 36% this year—making it the best-performing tech on the S&P 500, according to FactSet.

But government money alone won’t solve the problem—and certainly not quickly. Chip fabrication plants take years to build and equip. And catching up on a technological basis isn’t simply a matter of dollars spent. Intel has fallen behind Taiwan Semiconductor Manufacturing TSM -2.42% in the most-advanced production processes, even though the American chip maker has outspent its Taiwanese rival by an average of nearly 6-to-1 on research and development annually over the past 10 years, according to data from S&P Global Market Intelligence. Newsletter Sign-up

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There are also business practices to consider. A big part […]

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