On July 27, local time, the U.S. Senate passed the $280 billion “Chip and Science” bill, which includes $52 billion in subsidies and additional tax credits for the country’s semiconductor companies. However, in the opinion of American experts, the bill harms others and is impractical.
Hurt self and others
In an interview with China Daily, George Koo, founder of the American International Strategic Alliance Company, pointed out that before the United States made a decision not to allow China to obtain semiconductor technology, the semiconductor industry was a global market, and every supplier could Participate in competition based on its own comparative advantages.
Gu Pingshan analyzed: “This used to be an efficient market, and what stood out was the manufacturer that produced the best product at the lowest cost. Today, Americans have created a market centered on the United States, excluding China. This way. After all, no one wins.”
He further pointed out: “Chip makers are forced by the US to not sell chips to China, the world‘s largest market. China can no longer buy advanced chips from US suppliers and will be forced to develop its own. Every semiconductor supplier can only serve In smaller markets, higher costs and lower profit margins.”
In fact, the U.S. move backfired. Bloomberg reported that China has found a way to solve key technical problems. In Gu Pingshan’s view, the more the United States suppresses China’s development, the more determined China will be to promote scientific and technological progress and bypass the obstacles set up by the United States.
unrealistic
Gu Pingshan told China Daily that the implementation of the bill faces two major challenges.
First, $52 billion is a drop in the bucket for the semiconductor industry. Industry experts have previously said that building a new factory alone would cost nearly $20 billion, so the subsidy would not be enough to bring chipmakers back to the U.S.
Second, the U.S. chip industry has relied heavily on overseas manufacturers over the past few decades. Are the relevant skills still available in the U.S. today? The problem of lack of necessary skills cannot be solved overnight.
It’s also worth noting that the cost of opening a new chip factory in the U.S. is about 30% to 50% higher than in Asia, according to the Semiconductor Industry Association.
Some U.S. senators also criticized the bill. Senator Bernie Sanders believes that rebuilding chip companies in the United States is actually looting taxpayer money. Senator Ron Johnson said the bill was more in the interests of business.
Supporters of the bill say the subsidies would help address chip shortages and shield the U.S. from future disruptions to supply chains in East Asia. Gu Pingshan pointed out that there are signs that the era of chip shortage may end soon, and the era of excess is coming.
(Editor: Yan Yujie, Wang Hui, Zhou Fengmei)
[Editor in charge: Yan Yujie]