Opinion: CHIPS Act Escalates Long-Standing U.S.-China Tech Rivalry

By Richard L. Thurston
EETimes (August 10, 2022)

As U.S. House Speaker Nancy Pelosi flew to Taipei last week, President Joe Biden signed the CHIPS and Science Act in an effort to boost U.S. semiconductor production. But will it increase U.S. semiconductor competitiveness, or will it set back the U.S. industry in its ongoing technology rivalry with China? I fear the latter.

While providing billions of dollars in subsidies to the semiconductor industry in the form of fab construction grants, investment tax credits, and science and R&D incentives, for example, the CHIPS Act more dangerously imposes significant restrictions on chipmakers that would accept such U.S. incentives and that would also invest in their China operations during a 10–year period. Why will this legislation be detrimental to the U.S. semiconductor industry?

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