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 ...
Easy enough fix, zero out all future investments in communist china.
If your company is concerned with the restrictions then don’t take the cash. In fact, don’t take any taxpayer money.
That’s what Deep State is counting on.
Chips made in the US,Europe,Korea,Japan or Taiwan are OK with me...but I’d prefer the US. Chips made in China? No thanks!
Government funding chip maker
How about using tariffs to make US-made chips far more attractive than China-made chips?
CHIPS Act could see Intel take lion’s share, with TSMC Arizona plant a lower priority
Samsung Elec seeks tax breaks on $192 billion potential chip plants in Texas
Are states trying to do an end run around Deep State's strings attached offer...
I am of the firm belief that the taxpayers should not be subsidizing any business. That includes planned parenthood, chips, car mfg. etc.
https://www.wdtn.com/news/ohio/chips-act-passes-key-senate-test-paves-way-for-ohio-intel-plant/
$20B
Subsidies put the burden on the tax payer. A tariff puts the burden on the consumer. A tariff on imported electronics is the way to go.
Samsung and SK Hynix would appear to be most targeted by the provision. I don’t recall SK Hynix having plans for a US foundry.
“...but accepting those subsidies could tie their hands when it comes to future investments in China.”
And, before the companies know it, FedGov is requiring drag shows in the breakroom at lunchtime, tranny CEOs, and combo-pronouns on all the bathroom doors...because they took the money.
Removing the burdens on US industry - including the electronics industry - is the way to go.
Using the power of govenment to increase prices, to reduce competition, to choose winners and losers in the market place - this is just not a good idea.
US industry is staggering under the weight of Government. So slash taxes. Shield US industry from over-regulation, from enviromental lawsuits and from having to compete with government.
And of course - stop blocking the supply of energy in the service of Green theology.
Don't subsidise. Don't impose tariffs. Don't hurt-then-rescue. Just reduce taxes and remove the barriers to competition. Then get out of the way.
That is NEVER going to happen but we can get a tariff now.
Tariffs are patriot candy!! Patriots everywhere love imported tariffs.
Of all countries in the West, I think the US has the best chance of removing barriers to industry and of maing a general recovery. You guys have the resources, the people, the infrastructure and the political will.
The US was a net energy exporter under Trump. It can recover. The Biden regime won’t last much longer.
maing = making, ugh typo
Ther is zero political will to do any of that. It is getting worse. WE NEED A TARIFF AND WE NEED IT NOW.
You can have a tariff or a de industrialized service economy relying on 10,000 mile long "supply threads". Pick one or the other.
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