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Chips’ Political Moment Will Need to Last


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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