Posted on 12/23/2023 7:23:24 AM PST by FarCenter
Although China cannot flood the global market with chips produced with cutting-edge fabrication technologies, strong subsidies for the semiconductor sector in China make it possible for the country to flood the market with chips made on legacy process technologies, thus undercutting much-needed sales that generate revenue that is vital for R&D at Western firms. This tactic could spur the U.S. government to impose tariffs on products using mature processing nodes, reports Bloomberg.
The U.S. Commerce Department's Bureau of Industry and Security is set to survey over 100 companies in sectors like automotive, aerospace, and defense to figure out how much the U.S. relies on the older but essential semiconductors made in China. The survey is designed to find out how chips made on legacy process technologies (e.g., 40nm and older), which are still important for various industries, are bought and used by American companies.
China is known for providing hefty funds to its chipmakers. For example, China-based SMIC invested $24 billion in capital expenditures from 2020 to 2023 with support from banks, local governments, and state-controlled funds, far exceeding its earnings in the period, according to Nikkei. Other semiconductor companies also have generous support from the government, which is how they can quickly expand production capacity using tools that they can procure without any limitations and start producing chips like display driver ICs (DDICs) or power management ICs (PMICs) that are sold in billions of units every year.
(Excerpt) Read more at tomshardware.com ...
But a large part is simply a lower cost structure in an economy with GDP/capita about a fourth of that in the US. They can simply cost-reduce the well-understood, mature, manufacturing process for ICs just as they did for solar cells.
They could give them away, since Chinese chip plants are owned & managed by the CCP.
Biden will not do anything that would benefit the US as a matter of policy, and tariffs would go against his contract(s) with Xi.
“..Biden will not do anything that would benefit the US as a matter of policy, and tariffs would go against his contract(s) with Xi....”
^THIAT^ right there is enough to charge this vile bassturd for treason.
There’s a reason there are weight classes in boxing and MMA. You can’t have fair competition if someone has an unfair advantage going into a fight.
The same is true of economic competition. In a totalitarian government everyone is an obligatory employee without a contract and without true rights. Workforce costs are controlled by the dictatorship. ‘Laws’ are what the dictatorship says they are, so patents and intellectual property are not constraints. An open and free society can’t compete on even footing with a dictatorship without putting in place protections.
What does Red China buy from us? They buy some planes and some grain. The balance of payments stats are wildly in their favor. I say tax the *bleep* out of everything they send us!
Article argues covid in US was blowback from US economic warfare against China.
https://www.unz.com/runz/american-pravda-the-covid-epidemic-as-lab-leak-or-biowarfare/
Tariffs and quotas are a lousy way to protect US chip companies from competition. If China can sell the chips at a lower cost, fine. Let them come in and give consumers a break with lower prices on the products that use those chips. HOWEVER, at the same time, let US chip makers completely expense any R&D expenditures made in the current tax year, even before those new technologies come online. This is a win-win for consumers and chip companies. The only loser is the gov’t because it can’t steal your money through tariff collections and the R&D expensing on tax receipts from the chip manufacturer.
There are national security implications, some industries should be protected.
IF the Bidenistas do this, AND IF they do it for any stated reason other than “national security”, then it will be overturned at the World Court as they well know and they will clutch their pearls and wring their hands and proclaim their powerlessness over said World Court decision, and WE FReepers will know that it’s just Kabuki Theater pablum to be consumed by the ignorant masses ...
“Tariffs and quotas are a lousy way to protect US chip companies from competition. If China can sell the chips at a lower cost, fine.”
bullshit ... it’s insane to simply allow an enemy country tyo crush crucial domestic industry by giving away stuff for free ... that’s nothing more than a form of economic warfare and only weak countries allow this without retaliation ....
I agree, but tariffs have a way of hanging on long after they have served their purpose. Also, tariff protection is a “push on the string” policy; it’s like pushing on a string to get something to change. If you change tax policy instead, the benefits accrue only if you take an action that addresses the problem. Too often in the US, tariffs protect small emerging companies (a good thing) while the big producers just sit back and do nothing but let the higher prices induced by the tariffs fall through to the bottom line. Stockholders benefit even though the company does nothing to alleviate the problem.
The tax change approach still gives the emerging companies benefits as it invests in new technology, but existing companies don’t benefit unless they, too, invest in new technologies.
Sensible. The notion of competition is a matter for all who compete. As we watch, only some in the US want their 'fat of the land' and are willing to see it provided by others, Americans and other nations.
But this particular and massively indebted government wants collections in every form and manner it has and can construct, being insatiable for cash flow from those who have cash. Robbing Peter to pay Paul fails, when Peter is tapped out.
I think they steal more from us than buy.
I honestly find many policies that the gov’t does are counter-productive. Part of the problem is that long run solutions are needed but the politician sees the long run as their term of office. Politicians no longer work for us; they work for themselves. Any of you know a “poor” politican? How do they come to DC as average-income people but leave a few years later as multi-millionaires?
Here is a concept... Stop R&D and pause it. Go a few years with known tech that is already available and proven. There is no law that says everything absolutely has to be re-engineered from the ground up every year creating a demand for parts that are not even produced or available yet.
Chip Wars / Economic Warfare bump for later....
“^THIAT^ right there is enough to charge this vile bassturd for treason.”
If only we had representatives in government that had the nads or the integrity to do that. Alas....
charge ... for treason.
—
sedition, as treason can only be charged if a declared war is underway.
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