[Summary] "Semiconductor Future in the US" Biden Signs 366 Trillion Won Support Bill... Explicit China Containment

[Image source=EPA Yonhap News]

[Asia Economy New York=Special Correspondent Seulgina Jo] "It is not surprising that the Chinese Communist Party has lobbied to block the passage of the bill. The United States must lead the world in advanced semiconductor production. This law will make that happen."

U.S. President Joe Biden reaffirmed a message of restraint toward China, which is competing for technological supremacy, by signing the $280 billion (approximately 366 trillion KRW) semiconductor support bill, the Chips and Science Act.

On the 9th (local time), President Biden attended the bill signing ceremony held at the White House Rose Garden and stated, "This bill is a once-in-a-generation investment for America," adding, "The future of the semiconductor industry will be made in the United States."

He pointed out, "Semiconductors smaller than a fingertip form the foundation of the economy, from smartphones to automobiles," and noted, "Thirty years ago, 30% of all semiconductors were made in the U.S., but now it is less than 10%." He also mentioned that China, South Korea, and Europe are making large-scale investments in the semiconductor industry, emphasizing the intention to foster the industry.

After more than a year of discussions, this bill is evaluated as one that strengthens the semiconductor supply chain within the U.S. while openly targeting China, which is accelerating its semiconductor ambitions. Specifically, it provides a total of $52 billion in support for building semiconductor manufacturing plants and research and development (R&D) centers in the U.S., and applies a 25% tax credit to the companies involved.

In particular, the bill draws attention by restricting eligibility for support, preventing so-called ‘countries of concern,’ including China, from establishing or expanding semiconductor facilities. This was also the background for China’s repeated objections during the bill’s discussion process. White House Press Secretary Karine Jean-Pierre responded to a question at a briefing on the day of the bill signing about what message the bill sends to China by saying, "It shows that we are committed to investing in 'Made in America' and revitalizing manufacturing," adding, "China will not be able to stop us."

Additionally, the bill includes large-scale support for innovation in advanced fields and scientific research. Through this, the Biden administration aims to maintain the U.S.’s technological superiority in advanced industries and strengthen national security. Economic media CNBC reported, "U.S. officials believe that the COVID-19 pandemic triggered semiconductor shortages and supply chain disruptions, revealing the U.S.’s overseas dependence and potential national security threats."

In the market, the enactment of this bill is expected to benefit major companies such as U.S.-based Intel, Taiwan’s TSMC, and South Korea’s Samsung Electronics. Samsung’s new semiconductor factory being built in Texas is cited as a representative beneficiary. Additional investment plans are also being announced. On the day of the bill signing, Micron announced plans to invest $40 billion in memory semiconductor production facilities.

However, for domestic companies, this bill, which openly targets China, can be somewhat burdensome. The Washington Post (WP) pointed out, "The bill includes guardrail provisions that prevent companies receiving U.S. support from building semiconductor factories in China," noting, "This complicates the investment strategies of South Korean companies such as Samsung Electronics and SK Hynix."

Zachary Collier, Associate Professor at Radford University in Virginia, evaluated, "It could accelerate more companies moving their factories to the U.S.," but added, "It is not easy to replace China overnight in the global semiconductor supply chain."

This content was produced with the assistance of AI translation services.