U.S.-Led Chip Alliance Aimed at Curbing China’s Influence: Analyst
A proposed U.S.-led chip alliance is aimed not only at boosting production, but is also seen as a U.S. effort to counter China’s growing influence in the global chip market, a Taiwanese economic analyst said on August 20.
The “Chip 4” alliance is a U.S.-proposed strategic alliance of semiconductor powerhouses in the United States, Taiwan, Japan, and South Korea to enhance cooperation on the design and production of sophisticated semiconductors.
With a preliminary meeting of the alliance expected to take place at the end of August or in early September, Taiwan’s Ministry of Economic Affairs has proposed to continue its collaboration with the U.S. on supply chain resilience, industrial cooperation, and semiconductor supply security.
A Taiwanese economist, Roy Lee, said that although Taiwan is strong in semiconductor foundries, Taiwan relies on the U.S. and Japan for the supply of equipment and materials. There are areas where the three countries are reliant on each other, he added.
On the pros and cons of Taiwan’s participation in the Chip 4 alliance, Lee said that Taiwan should participate, given the close semiconductor links between Taiwan and the U.S., especially regarding supply chains and intelligence gathering.
It is believed that the U.S. might want to work with Taiwan, Japan and South Korea to impose controls on semiconductor exports and technology outflows, and thus form a group to exclude China from global semiconductor supply chains, Lee explained.
However, the U.S. proposal might put a certain amount of pressure on South Korea due to its close economic ties with China, its biggest trade partner, so Washington wanted to first talk with Seoul to see whether South Korea plans to join the Chip 4, Lee said.
China accounts for almost 60 percent of the total exports of South Korean chips, according to a report in the Korea Herald, which presents a dilemma for Seoul in having to choose between U.S. technology and the Chinese market, Lee said.
In July, the U.S. Congress passed the CHIPS Act of 2022 to strengthen domestic semiconductor manufacturing, design, and research.
In addition, Washington has been promoting the Chip 4 alliance and announced a ban on exports of advanced electronic design automation (EDA) software tools for 3-nanometer and other advanced chips to China in an effort to curb the development of China’s chip industry.
References:
[1] Focus Taiwan: https://focustaiwan.tw/business/202208210007
[2] Taipei Times: https://www.taipeitimes.com/News/biz/archives/2022/08/23/2003783966
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40 years ago, the Formosan Association for Public Affairs (FAPA) — a grassroots Taiwanese American organization that promotes freedom, democracy and human rights for the people of Taiwan — was established on August 23, 1982 in Los Angeles, California.
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