Chinese Trade Groups: CHIPS Act and Science Law Hinders Innovation
U.S. semiconductor developers and manufacturers of production tools have welcomed the U.S. CHIPS and Science Act, which provides subsidies to U.S. chip developers and manufacturers, but two Chinese industry groups have argued against the legislation. are stifling innovation, discriminating against foreign companies and fueling geopolitical tensions.
A joint statement by the China Commission for the Promotion of International Trade (CCPIT) and the China Chamber of International Commerce and Industry (CCOIC) global times Read.
The recently signed CHIPS Act and Science Act allows the U.S. government to award nearly $52 billion in subsidies and other incentives to local chip makers, with a 25% investment in new fabs worth up to $24 billion. Allows us to provide tax credits. Meanwhile, companies receiving funding under the CHIPS Act and the Science Act will spend the next decade building new fabs or expanding existing fabs in China and other countries that pose a threat to U.S. national security. is prohibited. Additionally, the new law will subsidize tens of billions of dollars in various high-tech research and development projects in the United States.
“On the one hand, this is a typical industry-specific subsidy and does not comply with the World Trade Organization’s non-discrimination principle.” china daily read. “On the one hand, the bill identifies certain countries as key targets, forcing companies to adjust their global development strategies and layouts.”
It is worth noting that a Chinese municipality co-owns a fab operated by Semiconductor Manufacturing International (SMIC), the country’s largest semiconductor contract manufacturer. Meanwhile, the state government backs Tsinghua Unigroup, which owns YMTC, the only 3D NAND maker in the country, and controls dozens of chip designers.
“The United States is using government power to forcibly change the international division of labor in the semiconductor sector, harming the interests of companies around the world, including those in China and the United States.” Anadolu Agency Read.
Currently, the US produces only 12% of global chip production, lagging far behind Taiwan, South Korea and China. Subsidies to US semiconductor makers make it more attractive to build fabs in the US than in Asian countries. But another important part of the law is to encourage research and development in the United States. About half of the world’s chips are designed in the United States, and additional federal subsidies could boost that share. It seems that the Chinese industry group also opposes this.
In addition to subsidizing semiconductor research, development, and manufacturing in the United States, the U.S. government restricts the sale of U.S. chip-making equipment to Chinese manufacturers (such as SMIC) to prevent the country from using U.S. technology. and make the equipment unusable for military purposes. Meanwhile, CCPIT and CCOIC are confident that US regulations will not slow down the development of China’s semiconductor industry.