How Large Are US New Chip Sanctions on China?

To What Size Do New Jeep Sanctions In The US Continue?
To What extent New Jeep Sanctions in US China Continue - The "national security guards" that the US Department of Commerce wants to impose on chip manufacturers receiving federal aid are expected to complicate China's semiconductor growth plans. Photo: Shutterstock

Some of the world's largest chip manufacturers, including Taiwan Semiconductor Manufacturing Co (TSMC) and Samsung Electronics, will be restricted from expanding their facilities in China, under proposed US regulations governing businesses that receive federal funding for semiconductor manufacturing, according to analysts.

Companies that receive a portion of US$52 billion in federal subsidies under the US Chips and Science Act put that money in "foreign countries of concern", particularly China, Russia, Iran and Iran, according to a proposal for "national security scarves" announced by the US Department of Commerce Tuesday. They will be banned from using them in projects in North Korea.

New standards, which set a list of semiconductors as essential to national security, prohibit fund recipients from installing new production lines or increasing the production capacity of an existing old facility by more than 10%.

They are also prohibited from engaging in significant transactions involving the material growth of advanced chip facilities in these countries for the ten years following receipt of the money.

Following the US-Dutch-Japan deal limiting the export of some advanced chip manufacturing machines to the mainland, the US-led Chip 4 Alliance with South Korea, Japan and Taiwan, and expanded trade sanctions imposed by the Biden administration last October, these railings are Washington's threat to China's halfway point. shows how the conductor continues to put pressure on development ambitions.

Enforcement of new US Chip Act regulations could force TSMC, the world's largest contract chip maker, to halt development plans at its chip manufacturing facility in Nanjing, the capital of eastern Jiangsu province.

Due to the US-China technology war and unstable cross-strait relations with Taiwan, Arisa Liu, a senior semiconductor research fellow at the Taiwan Economic Research Institute, stated that "TSMC's chances of further expanding its production in China are slim."

“TSMC will slow down its investments in the country in the future and will focus on building production capacity in the US, Japan and even Europe, with Taiwan remaining as the manufacturing hub,” Liu said.

To meet the growing demand for chips in the automotive industry, TSMC invested US$2021 billion to expand production capacity at its 28 nanometer wafer factory in Nanjing in 2,89. Advanced integrated circuits are produced in the Nanjing factory, mainly using 12 nm and 16 nm production technologies.

According to Lucy Chen, vice president of Isaiah Research in Taipei, TSMC “has taken proactive steps in adjusting its production capacity to avoid being constrained by similar bans.”

Taiwanese chip giant Sony Group Corp. and auto parts manufacturer Denso Corp. is building a $8,6 billion factory in the south of Japan. A $40 billion factory is also being built in Phoenix, Arizona, as part of a $12 billion commitment to produce more sophisticated semiconductors.

TSMC chose not to respond.
According to Liu of the Taiwan Institute of Economic Research, South Korean major semiconductor manufacturers with existing manufacturing facilities in China are expected to be more affected by the new US-proposed restrictions.

According to Liu, a significant part of the production capacity of companies such as Samsung and SK Hynix is ​​located in China. “If they can't increase their capacity or upgrade their production processes, their business will be significantly affected.”

According to recent sources, Samsung and SK Hynix, the world's two largest memory chip makers, are seeking support under the US Chip Act.

There was no prompt response from Samsung to a request for comment on Thursday.

On the same day, SK Hynix also issued a statement stating that it will “closely examine the statements of the US government” in light of the ongoing negotiations between Seoul and Washington.

Samsung operates a chip manufacturing facility in Xian, the capital city of northwestern China's Shaanxi province, that produces more than 40% of the company's total NAND flash memory chips.
About half of SK Hynix's DRAM chip production is produced at the company's facility in Wuxi, Jiangsu, which operates as a regional production base.

According to Wang Wenbin, spokesman for the Chinese foreign ministry, the obstacles planned by the US administration are "science-technology blockade measures and protectionist".

“Containment and suppression cannot stop China's development,” Wang said, adding that it will only increase the nation's determination and capacity for technological innovation and self-sufficiency.




📩 26/03/2023 00:33