Epilogue to years of trans-Pacific trade conflict, the Biden administration has just announced a plan called CHIPS aimed at restoring the United States as a leader in the semiconductor sector. The measure was a request from American high-tech industries which are already suffering from Sino-American tensions, and fear that the situation will worsen – especially in the event of an invasion, for example, of Taiwan by the Chinese army.
Indeed, the island of Formosa is home to one of the most important links in the manufacture of electronic chips in the world: TSMC manufactures chips for all the largest American tech firms with the most advanced manufacturing processes available at this time. day – Apple, Nvidia, Qualcomm, and even Intel are among its customers. To counter the deterioration of relations between the island and mainland China, TSMC is building factories elsewhere in the world – notably in Arizona and Germany.
New blow for China: the United States drastically limits relocations in the country
But it seems that the Biden administration now wants to prevent China from benefiting from technology transfers (and from a situation favorable to industrial espionage) which stemmed from the possibility for American giants of the sector to relocate any segment of their production in the country.
Thus, from now on, all American firms wishing to benefit from part of the envelope of the CHIPS program at 50 billion dollars will have to comply with a series of obligations. These firms will notably have thebanned from producing their most advanced technologies in China for a period of 10 years. US Secretary of Commerce Gina Raimondo explains to our BBC colleagues:
“We will implement safeguards to ensure that those who receive funds from the CHIPS program cannot compromise our national security… they will not be allowed to invest that money in China and they will not be able to develop advanced technologies in China, for a period of 10 years”explains Gina Raimondo.
And to add: “companies that receive this money can only set up factories in China producing mature technologies, exclusively intended for the Chinese market”. In addition to this $50 billion package, the Biden administration signed legislation that allocates $280 billion to boost research and development in the high-tech sector. Measures that include tax reductions for companies that choose to manufacture in the USA.
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In 1990, the United States was responsible for 40% of the world’s semiconductor production. This market share is only 10% in 2022.