For Chip Makers, a Choice Between the US and China Looms, Wall Street Journal, Mar. 28, 2023.
By Yuka Hayashi and Jiyoung Sohn
Semiconductor companies seeking federal grants under the Chips Act could face a tough decision: take Washington’s help to expand in the US, or preserve their ability to expand in China. The Biden administration last week proposed new rules detailing restrictions chip companies would face on operations in China and other countries of concern if the companies accept taxpayer funding. Some of the proposed restrictions, known as the China guardrails, were tougher than industry executives, lawyers and national-security analysts say they had expected—both for leading-edge semiconductor plants needed for advanced military weapons systems as well as factories making so-called legacy chips used in consumer electronics. “It’s going to make a good number of companies question whether they want to accept the Chips funding,” said Angela Styles, an Akin Gump lawyer who advises semiconductor-industry companies. The restrictions would be particularly onerous for East Asian companies with significant operations in China, where they have already invested billions of dollars. These include Samsung Electronics Co. and SK Hynix Inc. of South Korea, the world’s top two memory-chip makers, and Taiwan Semiconductor Manufacturing Co. or TSMC, the world’s largest contract chip maker.
(To be continued)