Big tech lobbies Congress to weaken ‘guardrails’ against Chinese business: report

Max Keating, DCNF

Semiconductor manufacturer Intel has been lobbying lawmakers to water down a provision from an upcoming subsidy bill that would constrain potential future operations in China, according to Politico.

Intel and the Semiconductor Industry Association have set their sights on certain “guardrails” in the CHIPS Act that prevent companies that receive funding from the bill from increasing advanced semiconductor development operations in China, Politico reported. Chip manufacturers want the definition of what counts as an “advanced” microchip to change with increases in technology, since the legislation at present could bar “advanced” semiconductor technology from being produced in China, and defines “advanced” as today’s cutting edge, according to Politico.

If Intel got its way, chipmakers would be able to make semiconductors a few steps behind state of the art semiconductor technology in China for the foreseeable future.

Intel shelved plans in November 2021 to take over a semiconductor factory in Chengdu, China, according to Bloomberg, but in March 2022 the company announced plans for a $2.5 billion investment for a wafer fabrication facility in Liaoning Province in Northeast China. China is Intel’s fastest-growing major market, Intel president and CEO Paul Otellini said in a press release.

Looks like the CHIPS bill to finance semiconductor fabs in the U.S. will also be financing semiconductor fabs in China. Everyone wins! pic.twitter.com/r57tOgpzG2

— Matt Stoller (@matthewstoller) July 18, 2022

“Legislation this complex and important requires input from all stakeholders. Intel and many companies in our industry have come together with our trade association to provide input to policymakers in order to ensure that we have the best legislation possible and don’t inadvertently undermine the global competitiveness of companies that receive CHIPS funds,” a spokesperson for Intel told the Daily Caller News Foundation.

Intel has previously received attention for acquiescing to the demands of the Chinese Communist Party. In December 2021, the tech giant apologized to its Chinese business partners and customers after telling its suppliers to avoid sourcing from China’s Xinjiang region due to human rights concerns, and later quietly and retroactively deleted all mentions of Xinjiang from past versions of a letter to suppliers.

The CHIPS Act is intended to make the U.S. more competitive with China in semiconductor production, according to Reuters, and includes $52 billion in subsidies and an investment tax credit to boost U.S. manufacturing.

White House press secretary Karine Jean-Pierre voiced her support for the guardrails at a press briefing Monday.

The Semiconductor Industry Association did not immediately respond to the DCNF’s request for comment.

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