Want to lock Chinese chips for 10 years! US chip bill passed!

July 27 news, according to foreign media reports, on Tuesday morning local time, the “American Chip Act” was passed in the Senate procedural voting session, which prepared for the final vote this week.

It is estimated that the part of the bill aimed at China is to require companies subsidized by the United States to not expand investment in high-end Chinese chips for 10 years after they build factories in the United States—that is, 14NM and smaller chips. Investment in China.

This is equivalent to forcing Qualcomm, Intel, AMD, Texas Instruments, NVIDIA, Samsung and other international chip manufacturers to choose sides between China and the United States, and may also affect international lithography machine giants such as ASML.

The United States also prepared a second-hand, namely the establishment of the United States, Japan, South Korea and China’s Taiwan “chip quadrilateral alliance.” The United States proposed this idea in March this year, but there has been no substantial progress. In the past two days, US Treasury Secretary Yellen is visiting South Korea, calling for the strengthening of the Korea-US battery alliance and lobbying South Korea to join the “chip quadrilateral alliance.”

According to reports, the U.S. Senate was scheduled to hold a procedural vote on Monday, but due to continued severe thunderstorms on the east coast, the procedural vote was postponed to 11 a.m. local time on Tuesday. On the eve of the Senate vote on the chip bill, that is, on Monday local time, US President Biden convened a meeting of business leaders and government officials such as the CEOs of Medtronic and Cummins to once again vigorously promote the passage of the chip bill.

After the Senate votes, the Chips for America Act will be sent to the House of Representatives for a vote. House Democratic leaders hope to schedule a vote as soon as possible to pass the bill before the House adjourns and send it to President Biden for signature.

It is reported that the “American Chip Act” includes $54 billion in appropriations for semiconductor manufacturing and research; billions of dollars in additional spending for scientific research to stimulate the development of emerging technologies in the United States; for companies that produce semiconductors in the United States 25% tax credit. That is, the bill would provide funds to companies such as Intel, Samsung Electronics, TSMC and GF to build chip factories in the United States.

According to industry analysts, even if the US chip bill is implemented and the US$52 billion is spent, the containment of China’s chip industry may not meet the expectations of the United States. The first is the small scale of funds. Samsung is preparing to build a factory in the United States, and its planned investment alone has reached $17 billion. It is a bit taken for granted that the US wants to achieve the strategic purpose of containing China’s chip industry with US$52 billion.

Moreover, international chip manufacturers are likely to adopt the strategy of building high-, middle- and low-end chips separately to ensure that they can maintain the Chinese market while evading the constraints of the Chip Act. Most importantly, a series of U.S. sanctions have forced China to develop its own chip industry, which has made significant progress. At present, the world market share of the US chip industry is about 12%, while China has rushed to about 10%.

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Published on 08/30/2022