Where the chips fall: South-East Asia's rising semiconductor fortunes

Where the chips fall: South-East Asia’s rising semiconductor fortunes

The recent slew of trade policy and legislative measures taken by the United States to curb China will hurt its biggest rival’s chip-making industry, especially with the passing of the Chips and Science Act on July 28.

But the effects of the US maneuvers may be short-lived, given the draw of China’s vast demand for chips, which are used in anything from consumer electronics to military equipment, incentivizing semiconductor companies to look for workarounds, analysts said.

A US$39 billion (S$55 billion) program under the Chips Act will give American or foreign semiconductor manufacturing and research firms grants of up to US$3 billion per project to set up or expand their production facilities in the US. But a condition of the Act, which aims to boost US competitiveness in advanced manufacturing with a US$280 billion package, prohibits recipients of federal funds from expanding or upgrading their chip capacity in China.


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