US Reviews Semiconductor Supply Chain Amid Tech Tensions with China
In the throes of an escalating technological battle, the United States has embarked on a thorough review of its domestic semiconductor supply chain and national defense industrial base. The move is seen as a strategic effort to mitigate the national security risks associated with the heavy reliance on Chinese-sourced semiconductor chips.
US Expands Technological Safeguards
Recently, U.S. Commerce Secretary Gina Raimondo declared the imminent enforcement of more stringent technology export controls to China. This move comes in response to the rapid progress in various industries and escalating concerns around intellectual property theft, forced technology transfer, and potential military applications.
(Read Also: China’s Economic Challenges in 2023: A Comprehensive Overview)
Organizations will be expected to establish a robust compliance program to abide by the emerging regulations. Tools like the Descartes Systems Group’s solutions, which offer restricted and denied party screening, export classification, and license determination and management, are set to aid businesses in staying in line with export compliance regulations.
Review of the Semiconductor Supply Chain
The U.S. Commerce Department has launched a comprehensive review of the semiconductor supply chain to identify vulnerabilities and mitigate potential threats. China, having swiftly become a significant player in the global semiconductor industry, has initiated concerns about intellectual property theft and potential military applications.
This review aligns with the growing cognizance of the geopolitical implications tied to technological independence. The semiconductor industry, integral to defense systems, critical infrastructure, and emerging technologies with military applications, is now at the forefront of the tug-of-war for dominance between the US and China.
(Read Also: China’s Economic Challenges in 2023: A Comprehensive Overview)
The CHIPS Act and Its Global Implications
The recent CHIPS Act, with billions of dollars promised for semiconductor facilities construction in places like Ohio and Arizona, has made Intel a potential frontrunner to receive funding. This legislation coincides with the one year anniversary of President Joe Biden’s signature law, the CHIPS and Science Act, which aimed to reduce reliance on Asia for semiconductor components.
However, the CHIPS Act has sparked questions about the adequacy of the incentives in leveling the playing field for U.S. companies against the lower building and operating costs in Asia. Amid continuing tensions with China over critical minerals supply chains for chip production, South Korea has requested that the U.S. reassess the guardrail provisions adopted in the CHIPS Act.
As the U.S. forges ahead with its review and potential regulatory reforms, China is keeping a close watch on the developments, vowing to safeguard the rights of Chinese businesses. The unfolding scenario underscores the enduring tensions between the two powers over technology and trade, particularly within the critical semiconductor industry.
