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At 10 pm Beijing time on August 9th, US President Biden signed the “2022 Chip and Science Act 2022” (CHIPS and Science Act 2022, hereinafter referred to as the “Chip Act”) in Washington, marking a rare act against a single industry. The high subsidy bill finally came into effect.
Previously, the “Chip Act” was successively passed by the Senate and House of Representatives of the U.S. Congress. After several revisions and adjustments, the overall amount of the Act reached 280 billion US dollars and was implemented in five years. Including subsidies for the chip industry, a 25% investment tax credit for semiconductor and equipment manufacturing, and supportive policies for R&D investment in wireless broadband technology.
Biden’s signing ceremony at the White House said: “The chip bill is a once-in-a-generation opportunity to invest in the United States.” He also claimed that the bill will help the United States “win the economic competition in the 21st century.” Including Micron, Intel, Hewlett-Packard and AMD and other company executives attended the signing ceremony.
Chips are used in almost every electronic device. In recent years, the “chip shortage” problem that has disturbed the supply chain has highlighted the shortcomings of the chip supply chain and affected the production of automobiles, consumer electronics and other industries. Under political and strategic considerations, the United States decided to strengthen investment in the semiconductor field.
In fact, the core purpose of the “Chip Act” is to use a large number of financial subsidies and tax breaks to increase the domestic chip manufacturing capacity and technology research and development capabilities in the United States, and to attract semiconductor factories to stay in the United States. Among them, attracting semiconductor factories to settle down is a major focus. According to the US Semiconductor Industry Association (SIA) statistics, in 2020, the semiconductors produced in the United States will account for 12% of the world’s total, a decrease of 25 percentage points from 30 years ago.
Now, the Chip Act has had a real impact. Micron Technology announced plans to invest $40 billion and create as many as 40,000 jobs between now and the end of 2030, in what it said was the largest investment ever in U.S. memory chip manufacturing. It will use grants and grants from the Chip Act to start production between 2025 and 2030, and is expected to increase the U.S. domestic memory chip production share of the global market from less than 2% currently to 10%.
Qualcomm has also agreed to purchase $4.2 billion in chips from GF’s New York factory, and has committed to purchasing a total of $7.4 billion by 2028.
Behind the high-profile Chip Act, however, is criticism that the subsidies it provides will disrupt the industry. The semiconductor industry association, an industry organization, compares the 10-year construction and operating costs. The cost of producing semiconductors in the United States is nearly 30% higher than that in Asia. For the semiconductor industry chain that has long been a global division of labor and cooperation, it is still doubtful whether the high subsidies can actually take effect. .
In this regard, TSMC founder Zhang Zhongmou believes that the development of localization of semiconductor production in the United States will face great challenges, and it is almost impossible to succeed. He also believes that it is an expensive, wasteful and futile move for the United States to increase domestic chip production. The main reason is that although the United States has a large number of chip design talents, it lacks the manpower to manufacture chips.
It is worth noting that the Chip Act requires that if the subsidized manufacturer knowingly cooperates with a “foreign entity of concern” such as China, conducts cooperative research or technology licensing activities, and the relevant technology or product can be used. Raising national security concerns, the U.S. Department of Commerce has the right to fully recover the subsidy. This also means that with the funds subsidized by the US government, it is impossible to build or expand advanced production capacity in China.
The provisions against China in the “Chip Act” contain an attempt by the United States to prevent China from realizing industrial upgrading. Previously, the United States not only intervened in China’s purchase of lithography machines, but also tried to form a “chip alliance” to exclude China from the advanced semiconductor industry. Recently, the United States plans to expand the export control of chip technology to China. Previously, the United States has prohibited related companies from selling EDA software with a process of 10 nanometers and below to China. Now it has been extended to below 14 nanometers.
Huatai Securities pointed out that for the Chinese semiconductor industry, it is necessary to pay attention to the restrictive clauses in the above-mentioned bill, which may affect the expansion of TSMC, Samsung, Hynix and other companies in mainland China. According to public information, TSMC has 16-nanometer and 28-nanometer chip manufacturing plants in Nanjing, Samsung has memory chip manufacturing plants in Xi’an, SK Hysterix has memory chip manufacturing plants in Wuxi and Dalian, and Intel and Micron also have chip packaging and manufacturing plants in China. Test factory.
Regarding the US “Chip Act”, China’s Ministry of Commerce criticized that some provisions restricting the normal economic and trade and investment activities of relevant companies in China will distort the global semiconductor supply chain and disrupt international trade. The Ministry of Foreign Affairs also stated that China “resolutely opposes” this, saying that no obstacles should be set up for normal Sino-US scientific and cultural exchanges and cooperation, nor should China’s legitimate development rights and interests be deprived or damaged.
Source: Interface News
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