The Recession of Chinese Influence 

by Olha Povaliaieva
Thursday, August 4, 2022
2 MIN
The Recession of Chinese Influence 

The United States has restricted the production of microchips in China not only for American companies but also for Taiwanese and Korean

The United States developed and adopted the historic $52 billion Chips and Science Act bars. The program provides funding to companies that manufacture microchips (Intel Corp. and Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co., and so on). With one condition: companies receiving funding for the production of logic and memory chips more advanced than 28 nanometers are not allowed in China and a country of concern like Russia. Anyone who violates the terms of funding will be required to repay federal subsidies in full fully.

The US terms could exacerbate relations with China. It will also affect the most prominent players in the chip market, such as Intel Corp. and Taiwan Semiconductor Manufacturing Co., which produces microchips that are 6 years ahead of Chinese technology. At the same time, the United States encourages these companies to develop in America.

"Legislation this complex and important requires input from all stakeholders. Intel and many companies in our industry have come together with our trade association to provide input to policymakers in order to ensure that we have the best legislation possible and don't inadvertently undermine the global competitiveness of companies that receive CHIPS funds", Intel speaker Nancy Sanchez.

"While China's chipmaking champion Semiconductor Manufacturing International Corp., can make more advanced chips than 28 nanometers, its technology is still at least six years behind industry leader TSMC. SMIC has been facing virtually insurmountable challenges in catching up with TSMC after the Trump administration pressured the Dutch government to prevent ASML from selling its most cutting-edge extreme ultraviolet lithography systems to China. The Chinese chip industry recently encountered a further setback as Washington quietly tightened China's access to relatively advanced chip equipment, sending stocks tumbling," Bloomberg.

The most significant portion of the US federal grant is expected to go to development by Intel, TSMC, and South Korea's Samsung Electronics Co. We remind you that during Nancy Pelosi's visit to Taiwan, the speaker announced the upcoming interaction between the United States and Taiwan within the framework of the Chips and Science Act bars.

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