Main article: US economy
Global Chip Market
Main Article: Semiconductors (Global Market)
2024: $32.8 billion allocated to boost semiconductor industry
2023
US cuts microchip exports to lowest since 2009
In 2023, the United States reduced microchip exports by about 20% compared to the previous year - to $11.6 billion. This is the minimum value since the global financial crisis, as stated in the study, the results of which were published in early October 2023.
According to RIA Novosti, citing data from the American Statistical Service, during the first seven months of 2022, the supply of microchips from the United States to world markets decreased by about 15% on an annualized basis. For the same period of 2023, the reduction was 19.2%. Both the pace of decline and the volume of shipments in monetary terms have been minimal since 2009, when exports collapsed by a record 41% year-on-year and amounted to about $10.4 billion.
There are several reasons for the sharp decline in microchip exports from the United States. This is, in particular, the overstretched market, the unfavorable macroeconomic situation, as well as tense relations with China.
 | The decline in exports is due to a global decline in demand for semiconductors. In 2020, there was a shortage of semiconductors, in 2021 the demand was met by manufacturers, customers purchased with a margin. As a result, demand fell significantly due to overstocking, "says Yegor Dakhtler, an analyst at BCS World of Investments. |  |
Due to current restrictions, China in 2023 reduced purchases of microchips from the United States by 51%, or $1.9 billion, to $1.85 billion. If in 2021 American products accounted for about 33% of Chinese chip imports, then in 2023 - only 13%.
Other big buyers are also cutting imports of microchips from the U.S. In particular, Taiwan in 2023 reduced purchases on an annualized basis by 1% - to $2.25 billion. Malaysia reduced orders by 19% (minus $352 million), Israel - by 32% (minus $167 million), Japan - by 46% (minus $128 million). Exports to the UAE, South Africa, Switzerland and Turkey fell.[1]
State subsidies for the production of semiconductors of the Biden administration
US President Joe Biden in April 2023 defends his administration's subsidies for the production of semiconductors, saying that they are not aimed at damaging China.
The law offers grants and tax credits to boost semiconductor manufacturing in the U.S. But that money comes with certain conditions, including the sharing of super profits with the government and strict rules banning significant expansion of production in China.
Shifting Chinese chip purchases to Vietnam, Thailand, India and Cambodia
Four Asian countries are leading the way in diversifying chip supplies in:,, and becoming USA Thailand Vietnam India Cambodia top of the list of winners in early 2023, as semiconductor production begins to move from traditional centers such as and. Taiwan China
2022
US banned the use of chips made outside the country
In October 2022, the US authorities issued a decree that prohibits the use of chips made outside the country. The restriction applies not only to companies from the United States, but also to any others using American technology.
Experts explain that the ban on US President Biden, in fact, forced American specialists working in the production of chips in China to choose between dismissal and loss of citizenship. As a result, American executives and engineers working in China in the production of semiconductors resigned en masse from Friday to Saturday, paralyzing the entire industry.
US President allocated $280 billion for chips
In August 2022, the president USA Joe Biden signed a law on the allocation of support, estimated at $280 billion, to the development of semiconductor production in the country. According to the head, states such a measure will help the United States get rid of dependence on, China which in recent years has become a leader in production. semiconductors
The law primarily creates financial incentives for chipmakers to move production ashore and ensure access to critical technology is never cut off. As of September 2022, American semiconductors account for 10% of global production. According to the Biden administration, most of the chips are made in East Asia, in particular in South Korea and Taiwan.
In the House, the bill was approved by 243 votes to 187. Earlier, the Senate passed the bill. He was supported by 64 senators, 33 opposed. On September 30, 2022, the document was signed by President Joseph Biden.
The Trump law would affect the country's China policy and spark discussions about the future of the relationship, according to former deputy national security adviser under Mira Ricardel's administration. Representative Texas and top Republican on the House Foreign Affairs Committee Michael McCaul, said it was crucial to protect semiconductor power in, USA as well as strong reliance on Taiwan for the most advanced chips.
According to the document, the total expenses for the development of the industry will amount to $280 billion[2]. Within the framework of the Law, $52,7 billion in the form of grants and other incentives, of which $39 billion to stimulate production, including $2 billion for previous generation chips used in cars and defense systems, $13.2 billion for research and development and labor development and $500 million to ensure the international security of information and communication technologies and the activities of the chip supply chain.[3] [2]Learn more here.
The bill also provides for also a 25% tax credit for those companies that invest in chip factories in the United States. The document proposes an increase in spending on various research programs in the amount of about $200 billion in the next 10[4]
US bans its companies from opening new chip plants in China
The presidential administration USA Joe Biden has banned large American manufacturers, semiconductors which are financed from the federal budget, from building new plants in the PRC for at least 10 years. As they write "" Sheets on September 9, 2022 information US Secretary of Commerce , Gina Raimondo confirmed this.
According to her, companies receiving funding from the American government will only be able to expand already operating factories for the production of chips and nodes in China exclusively for the needs of the Chinese market.
Such obligations are spelled out in the law signed by Biden in early August 2022 on the allocation of assistance to the American semiconductor industry.
It is assumed that due to the new measures, the US authorities want to overcome the shortage of semiconductors and reduce dependence on China for mass production. The country's government intends to invest more than $50 billion in increasing domestic production of microchips and semiconductor products.
The ban will also affect Intel, since the company is unlikely to refuse government support. Companies like Nvidia and AMD should not be directly affected, as they rely on third-party partners for production.
The federal grant program, which was announced in the United States in August 2022 to expand chip production in the United States, includes a requirement for companies seeking funding: they must pledge not to increase production of advanced chips in China.
The restrictions will hit leading chipmakers such as Intel Corporation and Taiwan Semiconductor Manufacturing Co (TSMC) - they were trying to build their business in China, Bloomberg reported. TSMC will not be able to substantially upgrade or expand its existing capacity, effectively losing growth opportunities in the world's largest Chinese semiconductor market.[5]
US bans high-tech companies from building new plants in China for 10 years
On September 7, 2022, it became known that the Biden administration announced that American technology companies receiving federal funding would be prohibited from building "advanced technology" facilities in China over the next 10 years.
The ban is part of a 50 billion plan dollars aimed at developing its own. semiconductor industries
American corporations are demanding more support from the state to reduce dependence on Chinese manufacturers.
They have already faced a global shortage of microchips, which has slowed production.
{{quote 'We are going to install barriers so that those who receive funds under the chip manufacturer support program cannot jeopardize national security, "said Minister trade USA Gina Raimondo, commenting on the US Microchip and Microchip Act. to science- They are not allowed to use these funds for investment in China, they will not be able to develop advanced technologies in China for a period of ten years. }}
Companies that receive money can only expand existing component factories in China to serve the Chinese market, the minister added.
The U.S. and China have long argued over trade, technology and industrial espionage.
In August, US President Joe Biden signed a bill to allocate $280 billion for high-tech production and scientific research amid fears that the US is gradually losing technological primacy to China.
The investment includes tax breaks for companies that build computer chip plants in the U.S.
As of September 2022, the U.S. produces roughly 10% of the world's semiconductors, up from nearly 40% in 1990. China, on the contrary, increased its share to almost 10%, in 2020 bypassing Taiwan and coming close to Japan and the EU in terms of production volumes.
The Chinese Embassy in Washington opposed the semiconductor bill, calling it reminiscent of the "Cold War mentality."
Some American chipmakers have already felt the impact of Washington's sanctions on the sale of American technology to China. In early September, U.S. officials banned leading chipmakers Nvidia and AMD from selling their products to China to build artificial intelligence.
Commenting on the ban, Dan Ives of think tank Wedbush Securities called the restrictions a "blow to the wind" for Nvidia.
| | This is really a blow to China, and it will properly fan the flame in terms of geopolitical tensions, "Ives told the BBC[6]. | |
US Senate allocates $52 billion to subsidize chip production in the country
In July 2022, it was announced that the US Senate was allocating $52 billion to subsidize chip manufacturing and research in the US.
Pentagon invests $117 million in the production of critical important microelectronics
In early May 2022, the US Department of Defense signed a $117 million contract with GlobalFoundries to strengthen US production of critical microelectronics. The first chips under this agreement are planned to be delivered in 2023. Read more here.
2021
US authorities put pressure on Taiwan and demand more chips for American automakers
In early May 2021, it became known that the US Department of Commerce is putting pressure on Taiwan Semiconductor Manufacturing (TSMC) and other Taiwanese firms, demanding that they prioritize the needs of American automakers and eliminate the shortage of chips in the American market. The government says a shortage of chips for the auto industry could result in severe job cuts. Read more here.
US government to invest $30 billion in chip production
In mid-March 2021, it became known that the US Senate allocated $30 billion to finance previously approved measures to strengthen chip production in the country. The measures are part of a new bill to increase U.S. competitiveness in the fight against China.
The bill is supposed to restrict Chinese companies' access to U.S. capital markets, as it is the main focus of the Trump administration's crackdown on Beijing.
A spokesman for Senator Chuck Schumer, who is leading the development of the new bill, did not respond to requests from US media to comment on the initiative. However, it is known that in February Schumer instructed lawmakers to develop a new bill aimed at increasing US competitiveness compared to China, and in 2019 proposed providing $100 billion in funding to stimulate research in key technological areas, from artificial intelligence to quantum computing.
Schumer's office also said the bill could be used as a means of emergency funding for a number of semiconductor industry development programs. One of those programs will provide grants to companies investing in American factories and equipment for manufacturing, testing, research and development of semiconductors. Another program will establish a public-private partnership with the aim of creating consortia of firms for the production of "safe microelectronics."
The semiconductor industry is also pushing for an investment tax credit to purchase special equipment, the cost of which usually far exceeds the cost of the plants themselves.[7]
| | There should be more capacity in the semiconductor market. Demand will only grow as different sectors of the economy put increasing pressure on existing semiconductor capacity. Thus, they should have large capacities, not only for PCs, but also for the automotive industry and other markets, where semiconductors are increasingly playing an important role, "commented Kent Tibbils, vice president of analytical company ASI. | |
2020: Degradation in semiconductor manufacturing
The U.S. and China are worried about Taiwan and South Korea's lead in semiconductor manufacturing. The U.S. accounted for just 12% of semiconductor capacity in 2020, while Taiwan and South Korea combined provided 43%, according to a report released in September 2020 by the Boston Consulting Group (BCG) and the Semiconductor Industry Association (SIA).
2017: Plans to curb Chinese investment
In early 2017, it became known that the administration of US President Barack Obama prepared a report that could form the basis of a bill restricting Chinese investment in the American semiconductor industry.
According to The Wall Street Journal, citing people familiar with this report, it includes recommendations aimed at strengthening the protection of the American chip market from the point of view of national security. In particular, Obama's chief scientific adviser, John Holdren, suggests that the Committee on Foreign Investment in the United States (CFIUS) take a tougher stance on transactions between American and Chinese semiconductor companies. The possibility of introducing new export control measures and restrictions on the creation of joint ventures is being considered.
| | The loss of leadership in the development of semiconductor innovation and manufacturing can have a strong negative impact on the US economy and even national security, Holren said in October 2016. | |
The US government considers the semiconductor sector one of the most important industries, since it covers the development of chips for a wide variety of electronics (smartphones, missiles, satellites, power systems). At the same time, the authorities fear that investments in the American semiconductor industry will open China up to communications, military and other systems related to national security.
| | We see that China's new attempts to acquire companies and technology are based on the interests of their government and do not pursue commercial goals. We will not allow any nation to dominate this industry and impede innovation through unfair trade practices and mass non-market government intervention, said US Secretary of Commerce Penny Sue Pritzker. | |
According to the Rhodium Group consulting company, Chinese investments in foreign semiconductor assets tripled in 2014 to $3 billion. Beijing has announced plans to spend $160 billion to turn the country into a leader in the global semiconductor industry. China plans to increase its use of domestic chips from 10% to 70% in 10 years.[8]
Notes
- ↑ US cut microchip exports by nearly 20 percent in a year
- ↑ Congress OKs $280B package to aid computer chip firms, counter China, New York Post, Jul 28, 2022, accessed March 16, 2023
- ↑ [1]FACT SHEET: CHIPS and Science Act Will Lower Costs, Create Jobs, Strengthen Supply Chains, and Counter China, The White House, Aug 09, 2022, accessed January 14, 2023.
- ↑ years. CHIPS Act Gives Hope to U.S. Semiconductor Industry
- ↑ US bans its companies from opening new chip plants in China
- ↑ The United States has banned high-tech companies from building new factories in China for 10 years
- ↑ U.S. Senate mulls $30 billion in funding to boost chipmaking sector, source says
- ↑ Chinese Access to U.S. Semiconductor Industry May Be Curbed
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