U.S. Chip Act Will Distort Semiconductor Market, China Grumbles

China's commerce ministry said on Friday, July 29, 2022, that a major new chips act passed by the US Congress will distort the global semiconductor supply chain and disrupt international trade, Meg Shen and Twinnie Siu reported for Reuters.

Photo Insert: US President Joe Biden and South Korean President Yoon Suk-yeol visit the Samsung Electronics Pyeongtaek campus.

The US House of Representatives passed the sweeping legislation on Thursday to subsidise the domestic semiconductor industry as it competes with Chinese and other foreign manufacturers.

China will continue to monitor the progress and implementation of the US act and take measures to safeguard its legitimate rights when necessary, the ministry said in a statement.

In response, David Shepardson reported for Reuters, the US Commerce Department disclosed that it will limit the size of government subsidies for semiconductor manufacturing and will not let firms use funding to "pad their bottom line."

On Thursday, the US House of Representatives gave final approval to legislation that provides $52 billion to boost semiconductor manufacturing and research. President Biden is expected to sign the legislation early next week.

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