The biggest victim of US chip policy appears! In the end, it is up to China

An article entitled “The U.S. chip bill may hollow out Asian Semiconductor industry” was recently published on the popular Australian Forum website, the writer is Peterson Institute for International Economics Senior Researcher Mary Lovely.

The report points directly to the US chip and Science Act, passed last year, which has disrupted global Semiconductor industry chains and raised fears of overcapacity and falling prices. Even more worrying is that the Semiconductor industry “Backflow” policy the US is promoting is hurting its Asian allies, which may put some diplomatic pressure on the US at the moment.

The chip and Science Act, a Semiconductor industry law signed into law by President Biden on August 9 last year, is intended to facilitate the "Return" of Semiconductor industry to the US. It may seem like an economic bill, but the politics behind it are so strong that it bans all companies that receive government subsidies from investing in Chinese mainland factories!

For asian-based Semiconductor industry suppliers, the impact of the bill has been devastating. According to statistics, 10 of the world's top 16 semiconductor exporters are based in east and south-east Asia, with 2021 accounting for 84% of global semiconductor exports. 

The policies being pursued in the United States will force them to abandon cooperation with Chinese supply chains, thereby raising the cost of manufacturing their products. Many American tech giants, including Apple, Tesla and Qualcomm, will also be affected.

Semiconductor products, also known as chips, are of great importance to the future of the global industry. It's not just about improving phone performance. Many cutting-edge industries, including autonomous driving, cloud computing, and AI, require faster, more powerful computing, which must be provided by chips.

That's why our country is spending trillions of dollars to build our own, independent, complete chip supply chain. Such a small piece of silicon, the burden is too important!

Today, with its technological and financial advantages, the United States is constantly using its political influence in the world to interfere with the market with its administrative power, although it will achieve certain results in the short term, but in the long run will encounter a huge“Backwash”!

As things stand, this backlash will mainly be reflected in the diplomatic level, and will mainly come from the U. S. Friends in Asia! The relationship bound by interests will eventually dissipate because of the exhaustion of interests.

Samsung and TSMC are the undisputed kings in the field of contract chip manufacturing, especially TSMC, whose global market share exceeds 50% year after year, and even has a monopoly advantage. Samsung's market share in the first quarter of this year was 11.7 per cent, although it was a bit lower.

Samsung, known as the“King of the chaebol,” earned 415 trillion won (2.25 trillion yuan) in revenue last year, accounting for 18.64 percent of South Korea's annual GDP. A Samsung brings in close to a fifth of South Korean GDP, a frightening statistic that confirms the statement that Zero Koreans can not escape death, taxes and Samsung

It is to be expected that, with the passage of time, the semiconductor policy of the United States will bring tremendous pressure on Samsung, and this pressure will certainly be transmitted to the South Korean political arena, thus creating a rift in the relationship between the United States and South Korea.

This is especially true for Taiwan, which has the biggest economic hand in global Semiconductor industry and is now on its way to the US, where TSMC has been “Called” by the US, the total investment amounts to a staggering $40 billion. Seeing that TSMC is about to become“Meizheng”, some politicians in Taiwan are certainly anxious! Future friction with the United States may be unavoidable.

In fact, from the perspective of geography, history and economy, many Asian Semiconductor industry countries, including Japan and South Korea, should move closer to China and seek its development path.

A strong Chinese supply chain will help them to reduce the cost of semiconductor manufacturing, and the geographical advantage of vast territory will ensure a continuous supply of raw materials, the world's largest consumer market can keep them going. And we also have no intention to engage in industry monopoly, more hope harmony and symbiosis.

Perhaps only by the“Iron Fist” after the heavy blow, they will reflect on their own mistakes! ... But time may be running out for them...  

: : Disclaimer: all original and republished statements and opinions are neutral, and articles are only sent for readers to learn and share. Articles, pictures and other copyright to the original author to enjoy, if there is infringement, contact delete. This article is reprinted from (core event public)