ICWise's Take on China's New Semiconductor Manufacturing Regulations Amid US-China Tariff Conflict
New Definition for 'Place of Origin' Benefits Local Foundries
In a strategic move, China has redefined the place of origin for integrated circuits (ICs), granting a significant advantage to local semiconductor manufacturers amidst the intensifying US-China tariff war. According to the China Semiconductor Industry Association (CSIA), the origin of chips now hinges on the location of wafer fabrication. This process holds pivotal importance in the chip supply chain alongside design, packaging, and testing.
Implications for Global Manufacturing
The new regulations could discourage American fabs from participating in the Chinese market, further incentivizing manufacturers like Semiconductor Manufacturing International Corporation (SMIC) to expand capabilities. This shift in definition emerges as a direct challenge to US efforts to bolster domestic production.
- Shares of Hua Hong spiked 14% post-announcement.
- SMIC shares surged by 5.9% following the news.
Amid this backdrop, He Hui from Omdia emphasized that most of China's imported chips are not directly sourced from US fabs, indicating limited immediate tariff impact. Nonetheless, the US chipmaker Micron Technology plans to introduce surcharges due to tariff-related costs, highlighting the ongoing disturbances in global semiconductor supply chains.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.