A sign is posted at the Nvidia headquarters on May 25, 2022 in Santa Clara, California.[Photo/Agencies]The US Senate is expected to pass a bill this week to invest billions
of dollars in the American semiconductor industry to boost competition
with China, but an expert is concerned that it could lead to higher
costs and reduced profits for the global market.The Senate voted for passage of the funding bill, known as the CHIPS
Act last week in a procedural vote and is expected to hold a formal vote
this week.The bill would provide around $52 billion in subsidies and tax breaks
to domestic chip manufacturers to incentivize them to build new
factories and bolster production in the country."Before the US decided to suppress China's access to semiconductor
technology, it was a globalized market where each supplier competed
based on the comparative advantages that it enjoyed," George Koo, a
retired international business adviser in Silicon Valley, told China
Daily."It was an efficient market where the best manufacturer with the
lowest cost won. By artificially creating one US-centric market that
excludes China's participation, everybody loses," he said."Chipmakers that are forced to abide by US restrictions will not be
able to sell to China, the largest market in the world. China will be
forced into developing their own advanced chips that they have been
buying from the US suppliers. Each semiconductor camp will serve a
smaller market with higher cost and reduced profit margin," he
continued.
US President Joe Biden and Co毫米erce Secretary Gina Raimondo (not
pictured) hold a virtual meeting with business leaders and state
governors to discuss supply chain problems, particularly addressing
semiconductor chips, on the White House campus in this March 9, 2022
file photo. [Photo/Agencies]Supporters of the bill said the subsidies would help address the chip
shortages, insulate the country from future supply chain disruptions in
East Asia and counter China's tech rise.But Koo said, "There are indications that the chip shortage may
already be coming to an end, and a glut could be around the corner."The industry has a history of quick shortfall-to-glut cycles. By the
time the CHIPS Act-funded new capacity comes on stream, it could be
three to five years away, and who knows which cycle it would be," he
said."Being denied access is only a temporary obstacle for China," said Koo."There are already reports in Asia Times and Bloomberg that China has
already found ways to work around the critical technology that they
can't have because of the American embargo," he said. "The net effect is
that China will become a formidable competitor in due course."If the bill is approved by the Senate, it would head to the House for
passage and then to President Joe Biden for his signature. The Biden
administration has been pushing for the legislation to advance, saying
it would address the global chip shortage and create new jobs for
Americans.But negotiations in Congress have dragged, though both Democrats and
Republicans are united in seeking to constrain China's economy. The
Senate last year passed a bill to strengthen the semiconductor industry
and US research and development, but the House had its own legislation."The CHIPS Act, even if approved, would provide $52 billion in
subsidy. And it's by no means certain that the subsidy would be
allocated effectively and lead to desired technical advances," said Koo.
"The US may no longer have the technical skills needed."Whether it becomes law or not will not have much effect on the
world's semiconductor industry. By exercising strict export control on
China, the US has successfully divided the chips market into two," he
said."The sum of the two halves will not be as large as the one original
global market. Everyone will take a hit in profitability," he added.更多橡胶市场关心咱们。
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