'The only way to beat China is to stay ahead of them' says US commerce secretary as she backs CHIPS investments handed out to Intel, TSMC over sanctions

Hardware’The only way to beat China is to stay ahead of them' says US commerce secretary as she backs CHIPS investments handed out to Intel, TSMC over sanctionsWhen you purchase through links on our site, we may earn an affiliate commission.Here’s how it works.

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The outgoing Biden administration has made a point of prioritising chip manufacturing over its four year run, while also enforcing tough sanctions on China in order to slow down its chip making progress.

With only a few weeks until the incoming Trump administration takes over, US commerce secretary Gina Raimondo has given an interview (viaThe Wall Street Journal)in which she discusses her belief that export controls matter far less than infrastructure investment in the global race for chip domination.

“The only way to beat China is to stay ahead of them”, she said. “We have to run faster, out innovate them. That’s the way to win.”

Despite Raimondo’s beliefs, the Biden administration has continued to enforce tough trade restrictions on China throughout its time in office, including a ban onUS semiconductor equipment suppliersfrom exporting to China, and the prohibition of the sale of advanced, high performance chips to the country, citing national security reasons.

In the meantime, the CHIPS act has been pouringbillions of dollars of federal fundinginto companies like Samsung, Intel and TSMC in order to woo chipmakers into building fabs on US soil.

Whether the CHIPS act continues under the Trump administration is a question mark for now, although president-elect Trump is not believed to be a fan.

Despite the bill initially receiving bipartisan support, Trump was quoted in October as saying “that chip deal is so bad”, and has plans of his own to enacthuge tariffs on multiple countries, including China—citing the country’s perceived failure to crack down on fentanyl smuggling as the reason for an extra 10% tariff on top of a planned 25% tariff on incoming goods.

Kush Desai, a spokesperson for the Trump transition, said that the incoming administration’s plans include “enacting tariffs, cutting taxes, slashing regulations, and unleashing American energy.” In regards to foreign chips, Trump was quoted as saying that the CHIPS act had provided"billions of dollars for rich companies"and that his plan would be to “tariff it so high that they will come and build their chip companies for nothing.”

What this means for chip manufacturing in the US moving forwards, and the global flow of chips in general, is unclear. While Trump has not yet stated whether he will abolish the CHIPS act entirely, that hasn’t stopped companies fromrushing to finalise agreementsin case of a sharp turnaround when the new government comes into power next January.

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