Analysis

US closes the net around Chinese semiconductor industry

Paul van Gerven
Reading time: 3 minutes

The US has almost completely cut off China from key resources to manufacture advanced semiconductors. The Middle Kingdom has no choice but to focus on mature nodes.

The US Chips Act, signed into law by president Biden on 9 August, will “distort the global semiconductor supply chain and disrupt international trade,” complained one Chinese government official. “It contains essentially discriminatory clauses in market competition and creates an unfair playing field, which goes against the WTO’s fair-trade principles,” the vice chairman of the China Semiconductor Industry Association (CSIA) lamented.

Interesting accusations coming from a country that has had its share of accusations of violating fair-trade policies. Not to mention the fact that the Chinese government is doing everything in its power to propel its domestic semiconductor industry, too. Earlier this year, for example, a number of US chipmakers accused Chinese companies of stockpiling chip manufacturing equipment and paying above-market prices. Beijing is financing this buying spree, Gartner analyst Gaurav Gupta told Bloomberg. It would explain why China has been the biggest buyer of semiconductor manufacturing equipment for two years straight.

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