US CHIPS law further worsens ties with China • The Register

China has reacted negatively to the passage of the US CHIPS law, saying the program is anti-competitive and aims to block China’s efforts to build its own semiconductor industry.

Tensions between the two have been further exacerbated by the start of formal trade negotiations between the US and Taiwan, largely aimed at strengthening chip supply chain capacities.

The US CHIPS Act was signed the law last weekwhich released $52 billion in funding to boost America’s semiconductor industry as part of the larger $280 billion CHIPS and Science Act, a move that would always likely throw China off the rails.

According to Bloomberg, the chairman of the China Semiconductor Industry Association told delegates at an industry conference that the US legislation “contains elements that violate fair market principles” and that it is “intended to help China’s rivals.”

“It essentially contains discriminatory clauses in market competition and creates an unfair playing field that contradicts the fair trade principles of the WTO,” the chairman is quoted as saying.

Earlier, China’s Commerce Ministry lamented that the CHIPS law would “distort the global semiconductor supply chain and disrupt international trade,” saying the country stands ready to take strong measures to protect its legitimate rights.

This is despite reports that China itself already has 80 billion dollars invested of a planned $150 billion in government subsidies aimed at building its semiconductor industry by 2030.

In a way, however, China is right, and America is trying to impede the development of China’s high-tech industries, especially semiconductors. The US earlier this week Banned the export of four technologies related to semiconductor manufacturing, declaring that holding it back was “vital to national security.”

This ban included the semiconductor material gallium oxide and diamond, electronic computer-aided design (ECAD) software, and pressure-boosting combustion (PGC) technology.

The US has also made efforts to prevent Netherlands-based ASML, one of the main makers of semiconductor manufacturing equipment, from doing so Exporting its products to China.

It was also reported that Washington is considering Restrictions on shipments of US-made chip fabrication equipment with which storage technologies with more than 128 layers can be manufactured.

Meanwhile, the US and Taiwan have agreed to begin formal trade negotiations aimed at supporting Taiwan and building supply chain resilience, a move expected to further worsen sour relations with Beijing.

Taiwan is vital to the global technology industries because it represents a large part of the world semiconductor industrywhich controls 48 percent of the foundry market and 61 percent of the world’s capacity to manufacture chips with a 16nm process node or smaller.

The guard reports that a spokesman for China’s foreign ministry urged the US not to “sign any agreements” with Taiwan, saying other countries should not have formal interactions with Taiwan in a way that has “sovereign connotations.” ® US CHIPS law further worsens ties with China • The Register

Laura Coffey

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