US Moves to Establish Detailed Criteria for Semiconductor Support Law to 'Contain China'

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The Joe Biden U.S. administration is forming a coordination committee to implement the CHIPS Act and is working on establishing detailed criteria. The bill, which invests a total of $280 billion (approximately 366 trillion KRW) to advance the U.S. semiconductor industry and maintain technological superiority, is regarded as a law that explicitly targets China, with which the U.S. is engaged in a hegemonic competition.

According to the White House, President Biden signed an executive order on the 25th (local time) to form the coordination committee. In the executive order, President Biden stated, "The CHIPS Act will bring about groundbreaking investments to restore and advance U.S. leadership in semiconductor research, development, and manufacturing," adding, "Efficient execution within the government is necessary to achieve this goal."

The committee, co-chaired by Jake Sullivan, White House National Security Advisor, and Brian Deese, Chair of the White House National Economic Council, includes members such as Secretary of State Tony Blinken, Treasury Secretary Janet Yellen, Defense Secretary Lloyd Austin, and Commerce Secretary Gina Raimondo. The committee will coordinate interagency efforts and specify support priorities to ensure swift enforcement of the law.

The executive order outlines support criteria including ▲ efficient use of tax funds ▲ alignment with economic and national security needs ▲ securing long-term leadership in each sector ▲ expansion and strengthening of manufacturing and innovation clusters ▲ promotion of private investment ▲ contributions to socioeconomically disadvantaged groups. President Biden emphasized, "Programs under the CHIPS Act must address economic and national security crises," adding, "To do so, domestic production capacity must be built to reduce excessive reliance on overseas production, and the U.S.'s economic production capacity and competitiveness must be enhanced."

This bill aims to strengthen the semiconductor supply chain within the U.S. while sending a deterrent message to China, which is accelerating its semiconductor ambitions. Specifically, it provides $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 relevant companies. It also includes provisions that prohibit support if production facilities are expanded or newly built in countries that pose a national security threat, such as China.

Meanwhile, the U.S. Department of Commerce has launched a website containing information related to the implementation of the CHIPS Act.

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