Posted on 08/02/2022 4:33:42 AM PDT by FarCenter
Chipmakers are cheering Washington's long-awaited passage of a bill to provide funding for the U.S. semiconductor industry, but accepting those subsidies could tie their hands when it comes to future investments in China.
Is it a price that the likes of Intel, TSMC and Samsung will be willing to pay?
The CHIPS and Science Act, a $280 billion package passed by both houses of Congress last week, contains $52 billion in support for the semiconductor industry. But it also specifies that companies accepting federal subsidies will be restricted from making any "significant transaction" to materially expand their chipmaking capacity in China or any other foreign country of concern for 10 years.
While there appears to be some leeway for chipmakers to protect their existing business in China, analysts and lawyers told Nikkei Asia that the terms of the legislation create a minefield for companies and could, in effect, force them to choose between the U.S. and China.
Semiconductors are a key battleground between Washington and Beijing. They serve as the brains of electronic devices, from smartphones to laptops to data centers, and they also play a crucial role in sophisticated weapons systems, such as the Javelin antitank missiles the U.S. is supplying to Ukraine.
The CHIPS+ Act, as it is also known, contains exceptions that may allow chipmakers to continue investing in China if those investments are aimed at protecting existing and significant business interests in the country. But these exceptions only apply to expanding existing facilities, and only for "legacy semiconductors." Intel and Qualcomm, for example, are the dominant players in the market for premium core processors for Chinese computer and handset makers, respectively.
Legacy semiconductors include 28-nanometer or older generation chip technologies, according to Tan Albayrak, an export controls and sanctions lawyer with Reed Smith LLP.
(Excerpt) Read more at asia.nikkei.com ...
If the government wants to stimulate domestic chip manufacturing, why not just put tariffs on imported chips.
Doing it with tariffs or handing out 23 billion to the domestic industries are efforts to achieve the same goal, but tariffs require no government spending and don’t impose restrictions on US factories in foreign countries.
While this Act likely has a lot of pork in it, something needs to be done to decrease our dependence on chipmakers in Asia, especially Taiwan. Really, our dependence on foreign chipmakers of any kind is a national security issue we should never have ignored.
You can have a country with a working economic engine, or you can have a country crushed under the heel of overmighty government.
The Biden regime cut energy supplies and has printed trillions in ‘money’. There’s plenty of political will to get Government out of the way - I suspect that your fellow Americans have strong opinions about ruinous gas prices and price inflation.
Are states trying to do an end run around Deep State’s strings attached offer...
There’s always a nasty catch in these things for the business and the taxpayers.
Fake analogy. The question is is the cost of taxes and regulation ( possibly adding 5% ( at most to consumer costs per unit ) worth it to keep the US industrial base here with all the primary and secondary jobs they create? That is the question, and the answer is yes it most definitely is worth it.
$52,000,000,000 in support of the semi conductor industry
Where’s the other $228,000,000,000 going?
We are such sheep. And they are so corrupt they do it right in our faces and they do not care anymore.
The industry that you believe Government will protect & nurture will not magically transform into virile, lean, world-dominating powerhouses.
They will be hot-house flowers kept alive on subsidy and contract carve-outs.
Jobs in companies that depend on government subsidy and sweetheart deals are basically welfare. America will pay through the nose for these jobs.
BS. DOMESTIC industry still has to compete WITH EACH OTHER. Or did you Free Traitors™ forget about that? Tariffs don't end competition they just transform it to domestic competition.
I don’t really like government subsidies for anything, but I understand why they are suddenly in a panic about this, for decades China’s computer chips were a joke, generations behind anything produced by the big players. But in the last few years the Chinese government has dumped a huge fortune into modernizing their semiconductor industry and have leapfrogged to where their chips are now only about a generation behind the big players (3-4 years or so) and will likely catch up within the next few years. At which point they will likely flood the market with dirt cheap computer chips in an attempt to put the likes of Intel out of business. Which might be good for consumers in the short term, but incredibly dangerous if they ever cut of the supply.
Tariffs are better, NO SUBSIDIES!!! No POLITICS!!!!
"Watch as a dozen hothouse flowers battle for dominance!"
"Gasp as they jump through political hoops, struggling for lucrative government patronage!"
"Will they emerge from this Willy Wonka greenhouse of toxic malinvestment and set-asides ready to take on the world?
No. No they won't.
Because they will never have learned how to compete in the real world. They'll have evolved to suck Government teat, and they'll stay that way.
And while everything goes to cr*p, you'll go on morosely blaming evil foreigners for the crime of out-competing you.
We're done here.
Unclear whether its Mainland China or Taiwan. Mainland is way behind Taiwan in fabs and chip design.
they will just funnel some money back into the swamp to get the teeth removed after the fact, as usual
Go away globalist. Your day has come and gone. Marx loved you guys....
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