UNITED STATES: The Biden administration disclosed the specifics of the bill designed to compete with China’s semiconductor industry and said that American tech businesses that get funding under the US Chips Act will be prohibited from constructing “leading-edge” chip facilities in China for 10 years.
Highlights:
- The Commerce Secretary claims that recipients of the US$52 billion in funding can only increase operations in China that produce chips from an earlier, less expensive generation.
- The most advanced manufacturing now accessible costs US$28 billion to produce domestically cutting-edge logic and memory chips.
The policies were revealed as part of a $50 billion (£43 billion) initiative to expand the domestic semiconductor industry. It occurs at a time when industry associations have lobbied for further government assistance to lessen reliance on China.
Due to a global shortage of microchips, output has stalled. According to US Commerce Secretary Gina Raimondo, the US Chips and Science Act will be put into place “We’re going to be implementing the guardrails to ensure those who receive CHIPS funds cannot compromise national security… they’re not allowed to use this money to invest in China, they can’t develop cutting-edge technologies in China… for a period of ten years.”
The recipients of the funds can only increase the size of their mature node plants in China to meet Chinese demand.The US and China are embroiled in a protracted trade and technological conflict.
- New China export regulations harm US chip manufacturers.
- The US invests much in technology to compete with China.
- Chips and China, worries over the sale of the UK factory.
A measure devoting $280 billion (£232 billion) to high-tech industry and scientific research was signed by US President Joe Biden in August amid worries that China is eroding the US’s technological advantage.
Tax incentives are included in the investments for businesses constructing computer chip manufacturing facilities in the US.
Since 1990, the US has decreased its production of semiconductors, which are essential to everything from cars to mobile phones, from over 40% to about 10% of the global supply.
The semiconductor bill was opposed by the Chinese Embassy in Washington, which claimed it was reminiscent of a “Cold War mentality.”
The consequences of Washington’s restrictions on the export of US technology to China are already being felt by some US chipmakers. US officials ordered Nvidia and AMD earlier this month to halt selling artificial intelligence processors to China.
According to Ives, this is a geopolitical shot across the bow at China, and it’s going to feed those flames (tensions).
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