Microchips, semiconductors-- and related industrial policy

[Crafty_Dog]

As a matter of policy, IMHO he has flipped from the right POV to the wrong one.

[Crafty_Dog]

The House passed the Building Chips in America Act of 2023, which would exempt some semiconductor manufacturing projects in the U.S. from federal permitting requirements. The bill is now headed to President Biden’s desk. (Permitting requirements have also held up other Biden administration priorities like green energy projects. However, Congress and the White House are likely moving to speed up chip production projects in anticipation of supply chain disruptions in the Indo-Pacific. – R.C.)

[Crafty_Dog]

Taiwan’s Semiconductor Manufacturing Company (TSMC) announced a new memorandum of understanding with Amkor to “bring advanced packaging and test capabilities to Arizona, further expanding the region’s semiconductor ecosystem.” (This move will shore up semiconductor supply chain security with local testing and packaging. However, it also increases Arizona’s value as a target for gray zone warfare. – J.V.)

[Crafty_Dog]

https://mexiconewsdaily.com/business/foxconn-nvidia-mexico-superchip-plant/?utm_source=newsletter_paid

[Crafty_Dog]

Reps. John Moolenaar (R-MI) and Raja Krishnamoorthi (D-MI) urged Commerce Secretary Gina Raimondo to block sales of advanced semiconductor equipment to suppliers of Chinese firm Huawei. Moolenaar and Krishnamoorthi said Chinese companies Pengxinxu, SwaySure Technology, Qingdao Si’En and “potentially many others” are part of a “clandestine network” of Huawei suppliers. U.S. chip equipment companies said unilateral restrictions would devastate American industry while allowing foreign competitors to gain ground in China.

[Crafty_Dog]

https://www.msn.com/en-us/news/world/taiwan-s-tsmc-stops-shipments-to-client-after-chips-sent-to-huawei/ar-AA1sPjk3?ocid=msedgntp&pc=HCTS&cvid=d4561836eb5f4422b03b145f023a9360&ei=23

[Crafty_Dog]

Taiwan Semiconductor Manufacturing Co. (TSMC) achieved early production yields at its first plant in Arizona that surpassed yields of similar factories in Taiwan, a major accomplishment in American semiconductor manufacturing. According to a TSMC spokesman, the plant will begin volume production in 2025.

[Crafty_Dog]

https://www.msn.com/en-us/news/politics/the-biden-administration-is-scrambling-to-send-billions-to-chipmakers-before-trump-takes-over/ar-AA1ulpXy?ocid=msedgntp&pc=DCTS&cvid=006cf0621b3d43a788bcba2d56717cb5&ei=22

[Crafty_Dog]

https://www.msn.com/en-us/money/markets/chip-supplier-stocks-jump-as-the-us-weighs-up-fresh-china-sanctions/ar-AA1uVerB?ocid=msedgntp&pc=HCTS&cvid=5cd02377c9374430ba8e1292a1ee754f&ei=30

[Crafty_Dog]

https://www.msn.com/en-us/news/technology/intel-chief-forced-out-after-biden-s-billions-fail-to-deliver-turnaround/ar-AA1v8dK1?ocid=msedgntp&pc=DCTS&cvid=df2d26a243f0449eadeee1f8590d9a37&ei=15

[ccp]

Certainly a shame for all of us.   He is a patriot that tried:


https://www.youtube.com/watch?v=srwxJUXPHvE

[Crafty_Dog]

December 27, 2024
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A New Trade Investigation Into Chinese Semiconductors
The list of strategic U.S. industries is growing longer.
By: Geopolitical Futures

By Chris Siepmann

On Dec. 23, the United States launched an investigation under Section 301 of the Trade Act of 1974 scrutinizing China’s policies regarding its foundational semiconductor industry.

Over the past decade, much of Washington’s focus in its economic competition with China has been on advanced logic semiconductors. These are the chips at the heart of the newest cell phones, laptops and advanced AI processors. Foundational semiconductors, meanwhile, were largely ignored, lost in the concerns over China winning the race for smaller node sizes and more advanced architectures. Foundational chips are used for applications where low cost is more important than bandwidth or processing power. To keep costs down, they are produced using mature process nodes – i.e., larger, less-advanced chips manufactured using previous-generation technologies. Whereas advanced node semiconductors are typically reserved for specialized applications, foundational semiconductors are used in a dizzying array of consumer, industrial and defense applications – everything from toys and smart appliances to laser guidance systems for missiles and night vision goggles.

However, China’s manufacturing aspirations were never limited to advanced chips. Its “Made in China 2025” industrial policy, first announced in 2015, does not differentiate between advanced and legacy chips in its top-line goals. It calls for China to produce 70 percent of the semiconductors it consumes by 2025 and 80 percent by 2030 – which, according to a report issued by the U.S. International Trade Commission, would result in China capturing 57 percent of the global semiconductor market and displacing production in the United States, Europe and Japan.

China will fail to meet its 2025 goal; it presently lags behind Taiwan, Japan, South Korea, Europe and the United States in advanced chip production. However, according to Taiwanese semiconductor market research firm TrendForce, China will more than double its chip manufacturing capacity within the next five years, the vast majority of which will be for legacy chips. Between current and planned fabrication projects, Beijing is on track to capture more than half of the global semiconductor market by 2029, potentially fulfilling the Chinese Communist Party’s long-term vision.

To accomplish this, China’s main policy tool has been a sustained torrent of targeted government subsidies. According to U.S. Secretary of Commerce Gina Raimondo, “[w]e know there’s a massive subsidization of that industry on behalf of the Chinese government, which could lead to huge market distortion," resulting in China capturing 60 percent of the global foundational semiconductor market in the “next handful of years.” Just one of these subsidy programs, the IC Investment Fund, is valued at $150 billion. For comparison, America’s CHIPS Act allocated a mere $53 billion to new domestic semiconductor investments.

The Section 301 initiation notice highlighted that China’s policies have led to “significant capacity expansion, artificially and unsustainably lower domestic and global prices, a protected domestic market, and emerging overconcentration of production capacity in the PRC.” Indeed, analysts have projected that China’s subsidized investments in foundational semiconductor production between 2022 and 2027 are likely to result in supplies more than doubling global demand. U.S. policymakers believe this would allow China to manipulate supply chains, undercut prices and suffocate the manufacturing base for these “boring” but critical chips in rival nations.

In addition to systemic overcapacity, the Section 301 initiation notice offers a long list of additional grievances, arguing that “the PRC pursues its targeting of the semiconductor industry through an extensive range of anticompetitive and non-market means, including through Chinese Communist Party guidance, directives, and control within state and private enterprises; activities of state-owned or state-controlled enterprises; market access restrictions; opaque regulatory preferences and discrimination; wage-suppressing labor practices; massive and persistent state financial support of industry, including government guidance funds; and forced technology transfer, including state-directed cyber intrusions and cybertheft of intellectual property.”

In other words, an increasing number of U.S. policymakers now realize that focusing mainly on advanced chips was myopic. They now see China’s potential dominance of legacy chip manufacturing as a national security threat on par with its potential dominance of advanced chip manufacturing. The “small yard and high fence” strategy of selectively restricting China’s access to leading-edge technologies was intended to minimize unintended economic harm to the U.S. and its allies, but was too clever for its own good due to its granular complexity. Chinese companies, with limitless time and motivation to find loopholes, were slowed but not prevented from accessing restricted chips and equipment, and U.S. companies designed advanced AI chips for the lucrative Chinese market falling just outside the government’s specifications. The tightening regulatory noose both failed to halt China’s development of its indigenous semiconductor supply chain and steeled party leaders’ resolve to accelerate it. And while advanced node semiconductors are critical to maintaining the lead in the AI race and other economic battlegrounds, they comprise a small percentage of total semiconductor production. By turning a blind eye to mature process node semiconductors, the U.S. appeared to be ceding most of the global semiconductor market to China.

Any attempt to remedy this situation with tariffs must confront the reality that most foundational semiconductors entering the U.S. do so as part of another finished product, such as a toaster, a television or a car. International customs conventions (the so-called “rules of origin”) permit tariffs based only on the classification of finished goods, not the parts contained therein. However, to be effective, any remedy resulting from the Section 301 investigation must somehow either target previously incorporated semiconductors (using a demand-side barrier such as tariffs) or the means to produce them (using a supply-side barrier such as export controls).

This may lead to “ends justify the means” countermeasures that ignore rules of origin to accomplish policy goals. In addition to further undermining international trade agreements and bodies such as the World Trade Organization, tariffs on incorporated components would also be extremely disruptive for manufacturers and importers, who would be forced to account for the provenance of every chip soldered into their products. Some influential think tanks and policy voices have already advocated for “see-through” tariffs on integrated components for which importers would bear the burden of accurately declaring the presence of Chinese chips.

The new Section 301 investigation is just one of many policy changes that could result from legacy chips’ accession to policymakers’ lists of strategic industries. Use of export control tools, such as the foreign direct product rule, could be broadened beyond AI-related chips and high-bandwidth memory to restrict Chinese access to a broader range of semiconductor equipment, including equipment for manufacturing legacy semiconductors. Other policy proposals, such as Sen. Marco Rubio’s “Stopping Adversarial Tariff Evasion Act,” would apply Section 301 China tariffs to legacy chips produced by Chinese-owned manufacturers even when not produced in mainland China.

President-elect Donald Trump’s first term in office inaugurated a new era of U.S. trade policy, with broad tariffs and new export control rules that were maintained and expanded by President Joe Biden. During Trump’s second term, expect a whole-of-government approach to further economic decoupling from China, starting with industries deemed critical to national security (a list that will continue to grow). This decoupling will employ tariffs, sanctions, export controls and other enforcement levers to block China’s access to the buyers, knowledge, equipment and tools needed for its strategy of subsidized, systematic industrial overcapacity, while leaning on allies to follow suit. At the same time, expect a resurgence of U.S. industrial policy aimed at resurrecting previously hollowed-out U.S. manufacturing capabilities and developing new initiatives in strategic sectors. In the words of Chinese President Xi Jinping, “[t]echnological revolution is intertwined with the wrestling of superpowers, with the high-tech sector becoming the main battlefield.” Trump has already proved that he’s not afraid of causing disruption if it helps him win.

Chris Siepmann is the managing director at Weller James, an advisory firm helping organizations navigate geopolitical and policy changes, reduce risk exposure, forecast future outcomes and build organizational resiliency. Previously, he served as director for trade enforcement at the Office of the U.S. Trade Representative during the Trump and Biden administrations, where he advised on and helped administer tariffs and exclusions under the first China Section 301 action, along with a variety of other issues. You can contact him at inquiries@wellerjames.com.

[Crafty_Dog]

Boosting capacity. Taiwan Semiconductor Manufacturing Co. plans to complete construction of new manufacturing facilities in Arizona this year and in Dresden, Germany, in 2027. Construction of its second plant in Japan is also expected to begin soon, with a third already under consideration.

[Crafty_Dog]

(17) COSTA RICA SELECTED AS MICROCHIP HUB: U.S. semiconductor firm Applied Materials announced that Costa Rica is being chosen for the company’s Global Services Office to focus on supply chain and procurement in Latin America. Subsidies under the CHIPS Act, which provides funding for tech investments in allied countries, was a major factor in the decision.

[Crafty_Dog]

https://www.msn.com/en-us/money/other/trump-to-impose-25-to-100-tariffs-on-taiwan-made-chips-impacting-tsmc/ar-AA1xYFRl?ocid=msedgntp&pc=DCTS&cvid=90808ff619244feea35140152ef479b9&ei=82

[Crafty_Dog]

(11) TSMC TRIES TO AVOID TARIFFS, HOLDS MEETING IN AMERICA: The Taiwanese Semiconductor Manufacturing Company (TSMC) is holding its first board meeting in America today to discuss ways to avoid President Trump’s tariffs.

The company is reportedly considering moving a packaging plant to the Arizona foundry, increasing investment in America, or accelerating the advanced chip manufacturing timeline at the Arizona foundry.

Why It Matters: Once again, President Trump’s high tariff plans are causing critical manufacturing sectors to reconsider moving their entire production line into America to avoid the additional costs. One Asia-based investment analyst pointed out that most TSMC chips do not go directly to America but to other countries for electronics manufacturing. This is a likely next target for the Trump administration. - J.V.

[Crafty_Dog]

This is MSN so let the reader beware. 

https://www.msn.com/en-us/money/companies/trump-wants-tsmc-to-take-over-intel-s-plants-that-s-a-terrible-idea-here-s-what-needs-to-happen-instead/ar-AA1zR43M?ocid=msedgntp&pc=HCTS&cvid=8cd40de07b0049f7c8dc89b8db7b6ba7&ei=11

[Crafty_Dog]

Chips and AI. U.S. President Donald Trump hosted the UAE’s national security adviser, Sheikh Tahnoon bin Zayed Al Nahyan, at the White House. The two discussed long-term strategic ties, focusing on investments in U.S. advanced technology, artificial intelligence, energy and health care. Abu Dhabi reportedly sees these investments as a pathway to securing entry into the U.S. semiconductor sector. The UAE has poured vast sums into data centers to position itself as a regional AI hub. The Biden administration previously tightened export controls on U.S. microchips to prevent their misuse by adversarial actors

[Crafty_Dog]

Trump Follows but Rebrands Biden’s Semiconductor Policy
Whether you call such an effort the Chips Act or the Investment Accelerator, the goal remains the same.
By Jim Secreto
April 20, 2025 2:32 pm ET


As President Trump tries to revitalize domestic manufacturing, he’s been clear about his love of tariffs—and his disdain for the Chips Act. Calling the 2022 law a “horrible, horrible thing” and urging Congress to repeal it, he cast doubt on the future of a once-in-a-generation $39 billion bet to bring semiconductor manufacturing back to the U.S.

Despite the rhetoric, the Trump administration isn’t walking away. It’s rebranding. Enter the Investment Accelerator, an initiative entrusted to Commerce Secretary Howard Lutnick. It doesn’t repeal or replace the Chips Act. Instead, it places a layer on top of it: an executive director, yet to be named, who will report directly to Mr. Lutnick and coordinate implementation with a broader mandate to reduce regulatory burdens and attract domestic and foreign investment.

This allows the administration to continue semiconductor incentives under a new name. Politically, it lets Mr. Trump pursue a crucial industrial strategy—reshoring semiconductor fabrication—without crediting President Biden or former Commerce Secretary Gina Raimondo, who launched the effort and lined up $500 billion in planned private-sector investment over the next decade.

The Investment Accelerator also provides political cover for America-first conservatives to support semiconductor subsidies. The executive order establishing the office says the new structure is about getting the “benefit of the bargain” and securing “much better deals than those of the previous administration.” While it doesn’t abandon strategic incentives, it recognizes that regulatory relief can be a tool to drive investment, and that subsidies can distort markets with unintended consequences.

The stakes couldn’t be higher. China has directed at least $150 billion to its semiconductor industry. U.S. production shrank, while Taiwan now produces more than 90% of the world’s most advanced chips—and faces growing pressure from Beijing. Meanwhile, America remains dangerously reliant on foreign supply chains for the semiconductors that power the artificial-intelligence systems essential to U.S. defense and intelligence operations.

While Mr. Trump promotes tariffs as the solution, few serious investors or policymakers believe tariffs alone can close the cost gap between building a chip factory in Phoenix and one in Taipei. Strategic incentives, combined with regulatory relief, are still essential to correct the market failure to protect long-term strategic interests. The Investment Accelerator confirms that.

So what should Messrs. Trump and Lutnick do? Three things.

First, finish the job. Of the 34 Chips awards announced, 20 are finalized—including grants for fabrication plants by Intel, Micron, Samsung and Taiwan Semiconductor Manufacturing Co. But not all the funding has been disbursed, with portions tied to future project timelines and milestones. A second tier of preliminary awards—targeting supply-chain firms, specialty fabs and defense applications—remains on the table. These are the deals for which a “better bargain” could be struck, especially with the help of experienced technical staff at the National Institute of Standards and Technology, where the Chips program still resides.

Second, cut the red tape. Big projects can get stuck in permits, environmental reviews and endless interagency sign-offs. Despite receiving $6.6 billion in direct funding and $5 billion in loans, TSMC faces regulatory hurdles that have delayed construction at its Arizona site, where it plans to invest up to $100 billion. A central office inside the Commerce Department could clear the path, meaning fewer delays, tighter timelines and better accountability from Washington.

Third, go beyond semiconductors. The Chips Act focused on a single foundational technology, funding fabs and R&D. But the Accelerator’s broader scope can drive growth in related industries—including the estimated $1 trillion in U.S. capital investment projected over the next five years in data centers and infrastructure powering the artificial-intelligence boom. By coordinating across federal agencies and working with states, the Accelerator can turn megaprojects into durable regional economies and position the U.S. to lead the next generation of technological innovation.

MAGA critics of the Chips Act may cast it as a Biden-era initiative, ignore its bipartisan support, and argue that tariffs are the better way to restore U.S. manufacturing. But China’s tech ambitions, persistent supply-chain risks, and the capital intensity of fab construction tell a different story.

President Harry Truman once said, “It is amazing what you can accomplish if you do not care who gets the credit.” The Trump administration’s move to rebrand rather than reject the Chips program gives it a chance to get the credit for reshoring semiconductor factories. For the sake of national security, let’s hope Mr. Trump finishes what the Chips Act began—and makes semiconductor manufacturing great again.

Mr. Secreto served as deputy chief of staff to Commerce Secretary Gina Raimondo, 2024-25.

[Crafty_Dog]

HT BBG

Note, this is happening despite the progress made with China over tariffs, which suggests to me Trump is taking a tough stance China is studiously ignoring:

US warns against using Huawei chips ‘anywhere in the world’

Commerce department guidance aims to toughen export controls on tech used by China to make AI processors
Huawei logo and the Oriental Pearl Tower near Nanjing Road Pedestrian Street in Huangpu district of Shanghai, China

Huawei’s Ascend range of chips is becoming more competitive in China with Nvidia’s artificial intelligence products © Cfoto/Sipa USA/Reuters
US warns against using Huawei chips ‘anywhere in the world’ on x (opens in a new window)

Demetri Sevastopulo in Washington, Zijing Wu in Hong Kong and Ryan McMorrow in Beijing

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

President Donald Trump’s administration has taken a tougher stance on Chinese technology advances, warning companies around the world that using artificial intelligence chips made by Huawei could trigger criminal penalties for violating US export controls.

The commerce department issued guidance to clarify that Huawei’s Ascend processors were subject to export controls because they almost certainly contained, or were made with, US technology.

Its Bureau of Industry and Security, which oversees export controls, said on Tuesday it was taking a more stringent approach to foreign AI chips, including “issuing guidance that using Huawei Ascend chips anywhere in the world violates US export controls”.

But people familiar with the matter stressed that the bureau had not issued a new rule, but was making it clear to companies that Huawei chips are likely to have violated a measure that requires hard-to-get licences to export US technology to the Chinese company.

“The guidance is not a new control, but rather a public confirmation of an interpretation that even the mere use anywhere by anyone of a Huawei-designed advanced computing [integrated circuit] would violate export control rules,” said Kevin Wolf, a veteran export control lawyer at Akin Gump.

The bureau said three Huawei Ascend chips — the 910B, 910C and 910D — were subject to the regulations, noting that such chips are likely to have been “designed with certain US software or technology or produced with semiconductor manufacturing equipment that is the direct produce of certain US-origin software or technology, or both”.

The guidance comes as the US has becoming increasingly concerned at the speed at which Huawei has developed advanced chips and other AI hardware.

Huawei has begun delivering AI chip “clusters” to clients in China that it claims outperform the leading US AI chipmaker Nvidia’s comparable product, on key metrics such as total compute and memory. The system relies on a large number of 910C chips, which individually fall short of Nvidia’s most advanced offering, but collectively deliver superior performance to a rival Nvidia cluster product.

News in-depthHuawei Technologies

Satellite images reveal Huawei’s advanced chip production line in China

Montage of the Shenzhen skyline with the Huawei logo and chips

The Shenzhen-based conglomerate currently offers its Ascend series processors, mainly the 910B and 910C, to Chinese companies. Huawei is boosting production capacity by building its own advanced semiconductor production lines, as Chinese companies cut off from Nvidia’s products are increasing orders.

There is growing US concern that China’s national champion will soon be selling AI processors in both China and foreign markets that can compete with Nvidia and other US companies’ products.

Nvidia chief Jensen Huang said last month Huawei was “one of the most formidable technology companies in the world” and US policies should help his company compete on the global stage.

Nvidia declined to comment on the bureau’s new rules. Huawei did not immediately respond to a request for comment.
The commerce department also rescinded the AI Diffusion Rule on Tuesday, a measure the previous Biden administration had planned would take effect on May 15.

It was designed to limit exports of AI chips to other countries and make it harder for China to circumvent existing US export controls. But the department said the rule was too bureaucratic — a view former Biden officials reject — and it would issue a replacement in the future.
The announcement came on the day Trump visited Saudi Arabia, where he unveiled a raft of deals, including a commitment by the kingdom’s new state-owned AI company, Humain, to build AI infrastructure using hundreds of thousands of Nvidia chips.

A source familiar with the situation said the scale of the proposed Gulf deals shocked many senior Trump administration officials. They were concerned about offshoring large-scale AI infrastructure, and also turning a blind eye towards Saudi and the United Arab Emirates’ collaborations with Beijing.

https://archive.ph/2025.05.14-090230/https://www.ft.com/content/2033b5b3-974d-4d40-8498-1c46d3a8db79#selection-1707.1-1722.0
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[Crafty_Dog]

Second:

I have no opinion here, this is well out of my lane, but FWIW

https://seekingalpha.com/article/4769772-is-this-nvidia-pullback-a-red-flag-or-a-buying-opportunity?source=acquisition_campaign_facebook&utm_source=facebook&utm_medium=cpc&utm_campaign=120224805945740573&utm_content=120224893804800573&internal_promotion=true&utm_term=120224805946010573%5EFacebook_Desktop_Feed%26&utm_id=120224805945740573&fbclid=IwY2xjawKTHidleHRuA2FlbQEwAGFkaWQBqx_nf5wPjWJyaWQRMXFTckVNWWVuNHdiWE9tMUMBHgHXv4gVKE3iQQKYT5wBj0lHwEvQKmA7zI3pIJQslq9c-tLciqRp_kAQwNcm_aem_rebmg7_N5HOTW0XkPslFPA