The US prepares action targeting allies’ chip plants in China - WSJ

The US prepares action targeting allies’ chip plants in China - WSJ

The Wall Street Journal (WSJ) has reported that the United States is planning to take action against allies’ chip plants in China. This move comes amidst growing tensions over semiconductor supply chains and a push to reshore production. The US has been increasingly concerned about its dependence on foreign semiconductor production, particularly from China, and has been encouraging domestic investment in chip manufacturing.

According to WSJ, the US government is considering imposing tariffs or other trade restrictions on Chinese chip plants owned by allies. This action is part of a broader strategy to diversify the global semiconductor supply chain and reduce reliance on foreign production. The WSJ report suggests that the move is aimed at addressing the national security risks associated with dependence on foreign chip manufacturing.

The WSJ article also notes that the US has been actively encouraging domestic semiconductor manufacturing through various incentives and funding programs. For example, the CHIPS Act, passed last year, provides significant funding to domestic chipmakers to expand their manufacturing footprint in the US. Texas Instruments, one of the largest US-based semiconductor companies, has announced plans to invest over $60 billion in expanding its US chip plants [1].

The US government’s move to target allies’ chip plants in China is likely to have significant implications for the global semiconductor industry. It could lead to increased costs for companies that rely on Chinese chip manufacturing, potentially impacting their competitiveness. However, it could also encourage more domestic investment in semiconductor production, as seen in the recent announcements by Texas Instruments and other companies.

The WSJ report underscores the complexity of the global semiconductor supply chain and the geopolitical tensions that are shaping its future. As the US and other countries seek to secure their semiconductor supply chains, there is likely to be ongoing debate and negotiation over the best strategies for achieving this goal.

References:
[1] https://www.business-standard.com/amp/world-news/texas-instruments-to-invest-60-billion-in-us-chip-plants-expansion-125061801262_1.html
[2] https://www.dailymail.co.uk/news/article-14827489/israel-iran-live-updates-washington-tehran-tel-aviv-trump.html