[News] US Reportedly Targeting China’s Mature Semiconductor Processes Next

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According to a report from TechNews citing industry sources, the US is considering expanding sanctions, with the next focus on China’s mature semiconductor processes. In addition to imposing tariffs, the determination of the chip’s origin will be strictly enforced. The standard, which previously considered the final packaging point, will now trace back to the front-end manufacturing and photomask origin.

Reportedly, it is believed that the US will significantly escalate the trade war after the presidential election, intensifying export restrictions on China. Currently, new tariffs of over 10% are being imposed on products from countries other than the US, and there are plans to impose tariffs of 60% or higher on Chinese goods.

It is noteworthy that the US government previously announced the imposition or increase of tariffs on Chinese electric vehicles, semiconductors, lithium batteries, and other products, with the semiconductor tariff rate set to rise from 25% to 50% by 2025.

The sources cited by the report believe that tariffs do indeed reduce imports and encourage the production of industries such as semiconductors, computer equipment, and steel in US factories. However, the cost is very high, potentially offsetting any overall benefits. Research indicates that tariffs lead to higher prices for US consumers and factories that rely on foreign inputs, and reduce exports of certain US goods that face retaliatory measures.

Meanwhile, for the future direction of the US, it can be inferred that chips manufactured in Taiwan and South Korea may also face tariffs.

Due to the intensification of the US-China tech war, the US is considering expanding export restrictions, targeting the mature processes that China is starting to shift towards. There have been continuous reports of China expanding its mature processes, raising global concerns about overcapacity in mature processes. The US government may in the future use tariff barriers to prevent products containing chips made with Chinese mature processes from being sold overseas at low prices.

The sources cited by TechNews further report that the determination standard will change from the final packaging location to whether the origin of the chip and photomask is manufactured in China.

In addition, Bloomberg also reports that the US administration is considering using the “Foreign Direct Product Rule” (FDPR). Under this rule, if a product uses any US technology, the US can implement controls. The US government has also notified companies such as Tokyo Electron and ASML that if they continue to supply advanced chip technology to China, the US will consider imposing the strictest trade control measures.

Read more

• [News] Taiwanese Foundries and Networking Companies to Benefit amid Escalating US-China Tech War
• [News] China Contributes Over 40% of U.S. Chip Equipment Makers’ Revenue despite Export Controls

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