US Commerce Secretary Warns Against Halting China’s Semiconductor Growth, Emphasizes Importance of Domestic Production

U.S. Commerce Secretary Gina Raimondo has characterized the effort to curb China’s semiconductor ambitions as a “fool’s errand.”Instead, she advocates shifting focus toward enhancing domestic production capabilities as the most effective strategy to maintain a competitive edge in the global semiconductor market.

Challenges and Realities of U.S. Export Control Measures on China

The landscape of U.S.-China semiconductor competition has intensified under the Biden administration. Both nations are racing to bolster their semiconductor sectors in a bid for technological supremacy. Despite the U.S. implementing stringent export controls aimed at stifling the advancement of China’s semiconductor capabilities, Secretary Raimondo’s recent remarks suggest that these efforts have not yielded the desired results. Rather, she emphasizes the importance of driving domestic innovation as the key to outpacing China.

Trying to hold China back is a fool’s errand. The only way to beat China is to stay ahead of them. We have to run faster, out innovate them. That’s the way to win.

– Gina Raimondo via WSJ

In an effort to stimulate U.S. semiconductor innovation, the Biden administration unveiled the “CHIPS Act,”which commits $53 billion toward tax incentives, grants, and loans to companies willing to establish manufacturing facilities in the United States. This initiative marks a pivotal moment, heralding what some have described as a “modern-day industrial revolution.”Major industry players, including Samsung, TSMC, and Intel, are already investing billions in new chip production facilities. While this represents significant progress towards semiconductor self-sufficiency, challenges remain.

TSMC getting N3E orders from various clients

Despite concerted international efforts—including restrictions from allies like Japan and the Netherlands—China has experienced remarkable growth in its own semiconductor capabilities, particularly in “mature node”technologies. Companies such as SMIC have achieved several breakthroughs, highlighting the limitations of U.S. export controls and revealing the resilience of China’s semiconductor sector.

Looking ahead, the potential shift in U.S. policy under a future Trump administration raises questions about the continued viability of initiatives like the CHIPS Act, which have faced criticism for their effectiveness. Regardless of policy changes, the competitive landscape is set to become increasingly heated as both nations strive to secure their positions in the global semiconductor market.

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