US Commerce Secretary Gina Raimondo, the Biden administration’s leading light behind attempts to limit China’s access to advanced bits and related technologies, then says that trade controls are only” speed bumps” and that” trying to hold China again is a fool’s assignment”.
The CHIPS and Science Act, a US$ 52.7 billion professional legislation signed into law by President Joe Biden in 2022, is, in Raimondo’s opinion, more significant than sanctions against China. It is a US$ 52.7 billion business plan.
In an article published on December 22 and published in The Wall Street Journal, Raimondo stated that the only way to defeat China is to keep ahead of them. ” We have to work faster, out develop them. That’s the way to win”, she said.
The CHIPS and Science Act, along with the Bipartisan Infrastructure Law and the Inflation Reduction Act, “mark the most significant investment in America since the New Deal,” according to President Biden, who spoke at the Brookings Institution before in December.
The biggest rate knock, issues with the CHIPS Act, and the unexpected effects of sanctions are not left out of this examination, which is not incorrect.
Long-term, trying to stop China may seem like a fool’s errand, but it has had some distinctive success: In 2019, the US government persuaded the Netherlands to outlaw the import of ASML’s EUV printing systems to China.
This minimal China’s ability to make cards beyond 7nm, and, at an expensive bend, 5nm design principles, while Taiwan’s TSMC is now in industrial manufacturing at 3nm and is planning to create 2nm in 2025.
As a result, Nvidia, AMD, Apple and other non-Chinese integrated circuit design companies have access to mass production at 5nm, 4nm and 3nm, while Huawei and other Chinese tech companies do not.
Samsung is close behind TSMC, although at a smaller scale, Intel is outsourcing to TSMC while working on its 3nm yields, and Samsung, Intel and Japan’s Rapidus are all aiming at 2nm.
Without EUV lithography, Chinese semiconductor manufacturers would be ten to fifteen years ahead of the rest of the world, according to ASML CEO Christophe Fouquet. At the leading edge of miniaturization, that may be true.
His predecessor, Peter Wennick, said,” If they cannot get those machines, they will develop them themselves. That will take some time, but they will eventually arrive there. But how much time? Five years have already passed.
Chinese engineers are currently having enough trouble creating their own ArF immersion DUV lithography, the chip-making technology that is just behind EUV, despite having imported a lot of the old equipment.
They have also turned to open-source RISC-V architecture, chiplets and creative thinking to circumvent export controls on EUV lithography, other sophisticated equipment and advanced ICs such as Nvidia’s A100 and Blackwell AI processors, which are produced by TSMC.
” One way China will get around export controls is ] using the hardware it has access to create extremely good training stacks,” said Jack Clark, former policy director at OpenAI and co-founder of California AI developer Anthropic.
He also wrote that” Made in China will be a thing for AI models, same as electric cars, drones, and other technologies”.
The US Semiconductor Industry Association ( SIA ) reports that, as of December 17, the CHIPS Program Office had announced$ 42.4 billion in grants and loans to 27 companies, catalyzing 40 semiconductor-related projects in 21 American states.
” These projects include total investment of more than ,$ 386 billion over two decades”, the SIA wrote,” with the vast majority invested by 2030″ . ,
The Department of Commerce announced$ 4.7 billion in funding for Samsung Electronics on December 20th, which is more than$ 47 billion, which may ease worries that the incoming Trump administration might decide to stop funding CHIPS Act funding, which the president-elect has referred to as a “bad deal.”  ,
The biggest CHIPS Act subsidies have gone to Intel, TSMC and Micron Technology. So far, only one company, Microchip, has abandoned its application for CHIPS funding – because it is closing factories, not building new ones.
But Intel, having dropped into the red and seen its share price collapse, is cutting its capital spending by more than 20 % and laying off more than 15 % of its workforce. CEO Pat Gelsinger, who lobbied hard for CHIPS Act funding, has also been forced out.
On balance, the CHIPS Act is a success but the crisis at Intel was an unpleasant surprise and the Act itself undermines US criticism of semiconductor subsidies in other countries, which have grown by leaps and bounds in China, Taiwan, Japan, South Korea, India and Europe. In consequence, some had hoped that the US share of the global semiconductor industry might not have increased as much.
The US share of the world’s chip manufacturing capacity will increase from 10 % in 2022 – when the CHIPS and Science Act was passed, to 14 % by 2032, according to a study conducted by the SIA and Boston Consulting Group in May 2024. This is the first time the US has expanded its domestic chip manufacturing footprint in relation to the rest of the world. In the absence of CHIPS enactment, the US share would have slipped further to 8 % by 2032″.
By 2030, according to Commerce Secretary Raimondo, the US will account for about 20 % of all advanced logic IC production. Part of that will be made by TSMC, which currently accounts for 64 % of advanced logic production, according to SemiWiki. Although TSMC is building fabs in Japan at the end of the decade, Taiwan will likely still be the majority of its production.
Getting to even 14 % won’t be easy. Only 9 % of the world’s semiconductor production capacity, according to the industrial association semi, will be in North America by 2025. That would put the US in fifth place after China ( 30 % ), Taiwan ( 17 % ), South Korea ( 16 % ) and Japan ( 14 % ).
Although it has become popular to predict that Chinese semiconductor investment will slow down, the Biden administration’s alleged “targeting of foundational semiconductors ( also known as legacy or mature node chips ) for dominance” investigation seems unlikely.
The Office of the US Trade Representative ( USTR ) will also look into the incorporation of these semiconductors into electronic equipment used in” critical industries like defense, automotive, medical devices, aerospace, telecommunications, and power generation and the electrical grid”, as well as “materials critical to chip manufacturing such as silicon carbide and wafers”.
Silicon carbide is used to create semiconductor power used in electric vehicles.
Chinese commentators point out the hypocrisy of the author of the CHIPS Act, who claims that China’s semiconductor production is primarily intended for domestic consumption, and that China keeps increasing its investments as the US tightens its sanctions, as noted by Asia Times journalist Yong Jian.
By now, it should be obvious that the US wants to keep the entire Chinese semiconductor sector, not just the advanced chips, which it claims are essential to national security. China’s large semiconductor trade deficit, which it has attempted to reduce, is both financially and politically unfavorably.
The “fool’s errand” Raimondo has belatedly acknowledged on her way out the door, but those sanctions continue to encourage the Chinese innovation Biden’s incoming administration had hoped to stop.
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