The CHIPS and Science Act was designed to return semiconductor manufacturing to the United States while simultaneously impacting China. It has certainly had an effect, but what overall impact has it made on the semiconductor industry?
Market demand in the Asian semiconductor supply chain has been affected negatively and the Act has led to instability and fed an uncertain global trade and economic situation. Many businesses are facing reduced or delayed orders.
The supply chain is traditionally highly globalized, but with the importation of some raw materials and equipment restricted, disruption of supply has resulted in extended production cycles, reduced production capacity and increased costs.
Naturally the Act has impacted international cooperation and intellectual property protection of scientific and technological innovation, a situation which could have a negative impact on technological innovation in the semiconductor industry.
Ultimately, the Act is changing the face and the structure of the industry. Some enterprises will fail, others will merge to survive. Some will choose to invest and build factories in other countries to avoid the impact of the CHIPS Act, which will intensify the global industrial transfer.
To adapt more quickly or effectively, some countries may introduce their own policies or legislation to deal with the fallout of the CHIPS Act. The industry landscape will change as local industries will receive encouragement to develop and intellectual property protection will be reinforced.
Though the result is a lack of global cohesion, which leads to instability in the industry, there are positives here too. The development of local industries further promotes the transfer and development of the global semiconductor industry as countries wake up to the instability and uncertainty of the supply chain, choosing then to accelerate industrial transfer to other countries and regions.
Enterprises now understand the true importance of industry cooperation and are building alliances. By way of example, the Chinese chip maker Hezong Technology, and Huawei have jointly established the Semiconductor Industry Alliance to promote the development of China’s semiconductor industry.
The path has been laid for standardization which is being promoted through the industry. Hezong Technology has further exerted its influence by joining with the Global Semiconductor Association to establish the Global Intelligent Hardware Industry Standardization Alliance. Standardizing the intelligent hardware industry is an important move to avoid technological blockade of the industry.
With any sudden high- level change the immediate effects can be negative. However, the semiconductor industry has spawned changes and innovations that will benefit the industry, promoting the development of the industry over the long term.
As a large independent semiconductor distributor in Asia, Win Source assessed the challenges and opportunities, then adapted primarily via further diversification of the supply chain to reduce the risk of reliance on any single provider.
Management of warehousing and logistics received focus, and a new system—establishing warehousing capabilities in multiple regions around the world—now streamlines goods delivery. The aim was to improve customer production while improving efficiency, so customers benefit from cost savings. Meanwhile the company’s professional risk control team, dedicated to policy research, has kept apace of relevant policy changes and taken corresponding measures to deal with them.
Win Source has actively participated in the promotion of industry standardization to prevent the industry from being blocked by technology. Aligning itself with associations like, IMAPS (International Microelectronics Assembly and Packaging Association), SEMI (a global industry association uniting electronics manufacturing and design supply chain) and VDE (Association for Electrical, Electronic & Information Technologies), amongst others, Win Source actively adopts a comprehensive strategy to deal with risks and maintain the stable development of business.
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