Countering the Chips Act, China has severely criticized this move as it will awfully hamper their domestic chip manufacturing
Amid the US’s fearless strategies to double its semiconductor production with the assistance of South Korea and the unleashing of the Chips and Science Act, China’s semiconductor yield has fallen down drastically, which is also due to COVID-19 backed supply chain disorderliness. The National Bureau of Statistic's survey report also added that integrated circuits (ICs) manufacturing slumped to 16.6 percent YoY to 27.2 billion units a month back, claims the South China Morning Post.
China on the other hand reported to have dropped 27.5 billion and 28.8 billion units for May and June, respectively. The discovered fever in China’s semiconductor manufacturing will impact the country’s vision to grow semiconductor production domestically and will be more difficult to reduce dependency on imported chips. Last week, America’s new president Joe Biden signed the historic $280 billion CHIPS and Science Act that also comprises $52 billion to enhance the nation's domestic chip production. The differentiating aspect of this Act is to offer incentives to chip manufacturers to cut reliance on imports mostly from China and construct fabs in the country itself.
Countering the Chips Act, China has severely criticized this move as it will awfully hamper their domestic chip manufacturing. According to a report of The Global Times, "It is disturbing for global supply chains to see the US apply increasing administrative intervention in normal market competition when it comes to advanced technology areas such as semiconductors. If Washington is determined to keep the so-called "chip war" going, it must be ready for China to fight back."
In retaliation, the Global Times recently tweeted US CHIPS Act offering huge govt subsidy & tax incentive to America's chip firms, is typical differentiated support policy, and China firmly opposes it, MOFCOM's spokesperson Shu Jueting said Thursday, noting some clauses are discriminatory & violate international trade rules. A Couple of months back in May, it was reported that China witnessed a boost in its semiconductor production as COVID restrictions were alleviated. Manufacturing and production of ICs witnessed over 6 per cent to 27.5 billion units from 25.9 billion units in April sa per the National Bureau of Statistics.
