CHIPS Act to Compromise the Growth of Semiconductor Industries, Claims Chinese Trade Groups

Multiple Chinese trade associations believe that the U.S. CHIPS Act and Science law, which will provide subsidies to American chip developers and manufacturers, will impede innovation, discriminate against foreign businesses, and heighten regional tensions. This is in contrast to the U.S. semiconductor developers and production tool producers, who appreciated the legislation.

According to Global Times, the joint statement of the China Council for the Promotion of International Trade (CCPIT) and the China Chamber of International Commerce (CCOIC) states:

“The act will intensify the global geopolitical competition in the semiconductor sector and hinder global economic recovery and future technology innovations,”

The U.S. government is authorized to offer grants and other incentives totaling around $52 billion to local chipmakers as well as a 25% investment tax credit for new fabs worth up to $24 billion under the newly enacted CHIPS Act and Science Bill.

USA aims for complete independency in semiconductor manufacturing. | Image: AP

Over the next ten years, businesses that get funding via the CHIPS Act and Science legislation will not be allowed to create new or expand already-existing fabrication facilities in China or other nations that pose a danger to American national security. The new law would also allocate tens of billions of dollars to several high-tech research and development initiatives in the United States.

To prevent China from using American technologies and equipment for military purposes, the U.S. government has restricted sales of American chip production equipment to Chinese manufacturers (such as SMIC) in addition to subsidizing semiconductor research, development, and production in the United States. In the meanwhile, CCPIT and CCOIC are certain that U.S. regulations won’t impede the growth of the Chinese semiconductor sector but they certainly would disrupt the industry.

Muhammad Zuhair
Passionate about technology and gaming content, Zuhair focuses on analysing information and then presenting it to the audience.