This analysis explains how the U. S. CHIPS Act Reshapes Taiwan and China through the source's decisions, evidence and operating constraints.
Read the evidence below as a decision trail: what changed, why it matters, which trade-offs shaped the result, and where the conclusion still depends on context.
In 2022, U. S. President Biden signed the CHIPS and Science Act, marking America's determination to revitalize its domestic semiconductor industry. The core of the U. S. CHIPS Act is to provide massive subsidies to encourage the return of advanced chip manufacturers to the U. S. and maintain its technological leadership through strict export controls. This article will provide an in-depth analysis of the specific contents of this bill and its impact on the global semiconductor supply chain, focusing on Taiwan and China to explore the opportunities and challenges these two semiconductor powerhouses face in the new international competitive environment.
The core content of the U. S. CHIPS Act
CHIPS and Science ActAimed at enhancing the U. S. semiconductor manufacturing capacity and reducing dependence on Asia, specifically including:
- Funding subsidies: $52.7 billion to support domestic chip manufacturing, R&D, and talent development; A 25% tax credit is offered to companies investing in semiconductor manufacturing equipment.
- Export controls: Restricting the export of advanced technologies to potential competitors such as China, especially high-performance computing (HPC) and artificial intelligence (AI) chips, to ensure America's technological leadership and national security.
Global Impact of the U. S. CHIPS ACT: Supply Chain Restructuring and Changes in Competitive Landscape
Supply chain restructuring
As the U. S. attracts chip manufacturers, global supply chains are undergoing restructuring:
- Challenges in AsiaSome production capacity from places like Taiwan and South Korea will gradually be shifted to the United States, which could weaken these regions' dominance in global supply chains.
- Europe's response: The European Union introduced the 'European Chips Act' in an attempt to boost domestic semiconductor production to compete with the United States in the future.
- Talent mobility: The global demand for semiconductor professionals is intensifying, especially in R&D-intensive technology fields.
Technological competition intensified
The U. S. strengthens its leadership through subsidies and export controls, exerting significant pressure on China and other countries. China is forced to accelerate the development of independent technologies, but in the short term, it is constrained by advanced process equipment and materials.
Taiwan's Opportunities and Challenges
Taiwan's opportunities
- Deepening cooperation with the United States：TSMCInvesting in a wafer fab in Arizona is expected to receive funding from the U. S. government, further consolidating its global leadership.
- Expanding global footprint: Through cooperation with the United States, companies like TSMC will be able to strengthen their penetration into Europe and other markets.
Taiwan's challenges
- Supply chain transfer pressures: As some high-end process capacity shifts to the U. S., the integrity of Taiwan's local supply chain may face challenges.
- Market divides: U. S. export controls on China may force companies like TSMC to readjust their market strategies, weakening profits in the Chinese market.
China's influence
Technical limitations
- High-performance chip limitations: U. S. export controls target high-performance chips from companies like Nvidia (such as A800 and H800), severely impacting China's development in AI and high-performance computing.
- Equipment and technology are limited: Companies like SMIC will find it difficult to break through processes below 5 nanometers in the short term, limited by a lack of advanced process equipment and technology.
Accelerated independent R&D
- Increase investment in research and development: The Chinese government is increasing investment in the semiconductor industry, promoting the development of independent technologies and localizing supply chains, such as Yangtze Memory's accelerated mass production of 3D NAND technology.
- Device restrictions have an impact: Due to the lack of high-end lithography machines (such as EUV) with support, China will find it difficult to catch up with the United States and Taiwan in advanced manufacturing processes in the short term.
Market and geopolitical challenges
As the U. S. restricts technology exports, Chinese semiconductor companies may seek to strengthen cooperation with other developing countries (such as Southeast Asia) to acquire new sources or markets for technology.
Future trends and policy recommendations
For the United States
- Coordinate supply chain policies with allies: Coordinate supply chain policies with allies such as Europe, Japan, and South Korea to prevent disorderly competition.
- Increase investment in talent education: Strengthen education and training for semiconductor talent to meet domestic industry demand.
Regarding Taiwan
- Strengthen our technological leadership: Strengthen leadership in advanced process technologies, ensuring the competitiveness of companies like TSMC in processes below 5 nanometers.
- Explore market opportunities: Actively explore new markets to reduce dependence on the US and China.
Regarding China
- Enhancing autonomy: Enhance the autonomy of the entire semiconductor industry chain and accelerate the localization of high-end equipment and materials.
- International cooperation: By cooperating internationally with European or Southeast Asian countries, reduce the negative impact of U. S. export controls.
Author's perspective
The implementation of the U. S. CHIPS and Science Act has not only reshaped the global semiconductor industry landscape but also had profound impacts on supply chain stability, geopolitics, and technological development. As key players in the global semiconductor industry, Taiwan and China each face both opportunities and challenges.
Personally, I believe the future development of the global semiconductor industry depends not only on technological breakthroughs but also on policy coordination and cooperation among governments worldwide. Although the United States dominates technology and funding, the technological capabilities and flexibility of Asia's semiconductor powerhouses should not be underestimated. With the growing demand for technological autonomy, the trend of "deglobalization" in the semiconductor sector may become increasingly evident, bringing a new situation that is both challenging and full of opportunities for Taiwan and China. How to maintain a competitive edge amid turbulent international circumstances has become a key issue that semiconductor companies and governments worldwide need to deeply consider.
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What to take away
The practical value lies in the decisions and constraints behind the U. S. CHIPS Act Reshapes Taiwan and China, not in copying one implementation without its context.