Ever since the oil crisis of the 1970s and the creation of the Strategic Petroleum Reserve, the United States has held millions of barrels of oil in a stockpile to safeguard the country—and its economy—from future supply shocks. Just as oil has kept the world’s economic engine running, a new critical component has emerged: the microchip. Everything from satellites and missiles to cars and toasters are powered by chips, making the semiconductor industry a linchpin of both the global economy and national security. The recent chip shortage affected virtually every industry, revealing a new vulnerability that businesses and policymakers are scrambling to address.

Chris Miller, associate professor at Tufts University and author of Chip War: The Fight for the World’s Most Critical Technology, and Dennis Lockhart, former president and CEO of the Federal Reserve Bank of Atlanta, join this episode of The OUTThinking Investor to examine the global competition to fortify supplies of semiconductors. They discuss the role of geopolitics in chip production, how artificial intelligence is driving innovation and demand, and macroeconomic implications for investors to consider.

For more on the near-shoring of strategic industries, visit PGIM’s OUTFront report, A New Era: From Deglobalization to Regionalization.