After a long year and a half, the US Senate has finally passed a "simplified" US chip bill. According to the "Economic Daily" report, the US $52 billion chip bill has an important additional condition: companies receiving subsidies must promise not to increase the production of advanced chips in mainland China, otherwise they may have to return the subsidy in full.
Specifically, the bill requires companies that receive subsidies from the U.S. federal government to not significantly increase the production of chips advanced in the 28-nanometer process in mainland China and other countries of concern for 10 years. Companies that violate the ban or fail to correct the violation may have to fully A refund of federal grants.
Intel and TSMC, which have already set up factories in mainland China, will be affected as a result. TSMC will be unable to significantly upgrade or expand its existing facilities in mainland China, potentially missing out on an opportunity to grow in the world's largest semiconductor market. According to Bloomberg, Intel has been lobbying hard for the U.S. not to impose restrictions on investment in mainland China's chip industry. Intel's plan to invest and build factories on the other side of the country in late 2021 was discouraged by the White House.
According to the US "Capitol Hill" website, at present, the United States still relies on overseas chip manufacturers. Boosting production of U.S.-made computer chips could indeed cushion the supply chain shock that many U.S. industries are currently facing. However, the report pointed out that such non-market behavior is bound to destroy the existing global chip industry chain, which is likely to lead to overcapacity of global chips.