Experts denounce the American chip subsidy plan

As the world’s largest chip market, the Chinese mainland is an indispensable part of the global semiconductor industry chain. [Photo/Sipa]

‘Fear of China’, secret desire to counter its rise in high technology, behind the movement

The US government’s $280 billion plan to subsidize its domestic semiconductor manufacturing and fund science and technology innovation belies Washington’s long-claimed free-market position and its aim to counter China’s rise in the high-tech industry would be very difficult to reach. , experts said on Friday.

Their comments came after the U.S. Congress voted this week to pass the Chips and Science Act, which includes $52 billion in subsidies for U.S. companies making computer chips, a provision that provides tax credit. tax for investment in chip production, as well as funding to spur innovation. and the development of other American technologies. The bill will be forwarded to the US President for approval.

Zhong Xinlong, a senior consultant at the China Center for Information Industry Development Consultancy, a Beijing-based consultancy, said that although US officials have used many phrases to justify the law, such as national security or the resolution of the US supply chain anxiety, the main behind- the scene driver of the Act is China. Or, more precisely, the fear of China.

Zhong said Washington aims to suppress the development of China’s chip industry and shift the center of chip production to the United States, further improving its own voice in the semiconductor market.

But such subsidies to the U.S. semiconductor industry are a one-sided move that would disrupt competition and the entire global chip supply chain, Zhong said.

The legislation, for example, would bar companies from expanding semiconductor manufacturing in China for 10 years after receiving a grant to build a factory in the United States, Bloomberg reported on July 18. Companies could continue to invest in manufacturing “legacy” chips in China. , but the definition of this term is unresolved.

Such requirements ignore normal business principles and force US chip companies to limit their presence in China, which will reduce the operational efficiency of the global semiconductor chain, exacerbate the protracted chip supply shortage for cars and, more importantly, will run counter to the tangible business benefits, Zhong said.

As the world’s largest chip market, the Chinese mainland is an indispensable part of the global semiconductor industry chain. It consumes more than 50% of all semiconductors in the world. They are assembled into technology products to be re-exported or sold domestically for final consumption, according to market research firm Daxue Consulting.

“Access to this massive market is essential for the success of any globally competitive chip company today and in the future,” said the Semiconductor Industry Association, a Washington-based group that represents the American semiconductor industry.

Bai Ming, deputy director of international market research at the Chinese Academy of International Trade and Economic Cooperation, said the United States has often accused China of “subsidizing” its domestic semiconductor industry, but that ‘they now reserve such a large budget as well as taxes. pauses to subsidize its own chip industry. It’s a blatant demonstration of the double standards it employs in its pursuit of technological prominence.

Bai said the US chip legislation may not achieve its hidden purpose of reshaping global semiconductor supply chains. The overall cost of manufacturing chips in the United States, for example, is not very competitive in the global market, mainly due to its high labor cost.

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