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Friday, October 07, 2022

US bans tech companies from opening factories in China

hidayatullah.com- US tech companies receiving government funding will be barred from setting up “advanced technology facilities” in China for a decade. It was announced by the government of President Joe Biden.

The policy was taken in line with the US government’s plan to increase domestic production of semiconductors – the “brains” of various modern electronic components ranging from household furniture to vehicles – most of which are produced in Asia. The Biden government had provided a budget of about $ 53 billion for this.

The US Chips and Science Act (CHIPS), a law passed by the US Congress in August, is a response to a technology dispute between Washington and Beijing and calls for government support by US companies to reduce reliance on components from Chinese manufacturers.

The US Commerce Department said it was awaiting applications until February next year from companies interested in receiving $39 billion in government subsidies for semiconductors to build new plants in the US. This government program will also provide a 25% rebate in investment tax for chip factories that start manufacturing from 2023.

“We will also implement a guardrail to ensure that those receiving the Chips Fund cannot put national security at risk,” US Commerce Secretary Gina Raimondo said in a statement. Guardian Wednesday (7/9/2022). “They are not allowed to use this money to invest in China; They cannot develop cutting-edge technology in China; They cannot send the latest technology overseas.”

The CHIPS Act provides a total of $280 billion for high-tech manufacturing and research, and is designed to increase US competitiveness against China.

The US currently produces only 10% of the world’s semiconductor supply. Most of the chips used in electronic equipment in the world today are manufactured in factories in Taiwan and South Korea.

The COVID-19 pandemic has reduced computer chip supplies, even suspended vehicle production in the UK and other countries, and virtually stopped production of various technology companies and other electronic components.

What’s more, the lack of chips adds to China’s dominance in both industrial and economic sectors as well as security, including its pressure on Taiwan.

The above conditions encourage the expansion of semiconductor production in the US, Japan and the European Union.*

Tail: Deeja
Editor: I knew

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