Month: August 2022

U.S. President Joe Biden has signed the CHIPS and Science Act, which aims to boost U.S. competitiveness against China by allocating billions of dollars toward domestic semiconductor manufacturing and scientific research.

“The United States must lead the world in the production of these advanced chips. This law will do exactly that,” Biden said in remarks during the signing ceremony Tuesday. The president is recovering from COVID-19 and coughed repeatedly during his remarks.

He called the bipartisan legislation a “once in a generation investment” in the country and said it will create good jobs, grow the economy and protect U.S. national security.

Biden noted stiff competition with China in the chips industry. “It’s no wonder the Chinese Communist Party actively lobbied U.S. business against this bill,” he remarked.

Biden was joined on stage for the event by House Speaker Nancy Pelosi, Senate Majority Leader Charles Schumer, Commerce Secretary Gina Raimondo, and Joshua Aviv, CEO of Spark Charge, an electric vehicle charging network.

Schumer called the legislation the “largest investment in manufacturing science and innovation in decades” and thanked Republican Senator Todd Young for his partnership for over three years working on semiconductor-related legislation, beginning with what was then called the Endless Frontier Act.

The proposed act went through various iterations before it was passed as the $280 billion CHIPS and Science Act on a 243-187 vote in the House of Representatives and a 64-33 vote in the Senate in July.

Last year, a semiconductor shortage affected the supply of automobiles, electronic appliances and other goods, causing higher inflation globally and pummeling Biden’s public approval rating among American voters.

Catching up in the chips race

The CHIPS Act includes $52 billion in incentives for domestic semiconductor production and research, as well as an investment tax credit for semiconductor manufacturing. Advocates say it will allow the U.S. to catch up in the global semiconductor manufacturing race currently dominated by China, Taiwan and South Korea.

Following the passage of the bill, the White House noted that Micron, a leading U.S. chip manufacturer, will announce a $40 billion plan to boost domestic chip production while Qualcomm and GlobalFoundries will unveil a $4.2 billion expansion of a chip plant in New York.

The U.S. share of global semiconductor manufacturing capacity has decreased from 37% in 1990 to 12% today, largely because other governments have offered manufacturing incentives and invested in research to strengthen domestic chipmaking capabilities, according to a state of the industry report by the Semiconductor Industry Association.

Now China accounts for 24% of the world’s semiconductor production, followed by Taiwan at 21%, South Korea at 19% and Japan at 13%, the report said.

The CHIPS Act also includes $4.2 billion to fund defense initiatives and the U.S. mobile broadband market, particularly efforts to promote non-Chinese 5G equipment manufacturing.

Broadly, the legislation lays out a strategy for Washington as it aims for global technological and economic dominance – gaining production autonomy by leveraging allies, including South Korea and Japan and eliminating political dependencies on the global semiconductor supply chain.

That strategy puts the U.S. on a collision course with China, which also aims to be the global leader in semiconductors. In 2015, Beijing launched the Made in China 2025 project, which aimed to increase chip production from less than 10% of global demand at the time to 40% in 2020 and 70% in 2025.

The Taiwan factor

Taiwan — a self-governed island that Beijing claims to be its breakaway province — is the main producer of the world’s most high-tech chips. It lies at the heart of the semiconductor showdown, the latest battlefront in the increasingly tense U.S.-China strategic rivalry.

Taiwan accounts for 92% of the global production of 10 nm or smaller semiconductors, essentially creating what some observers have characterized as a “silicon shield” that ensures American support in the event of a Chinese attack, as well as a deterrence against such a move.

In a visit to Taipei that angered Beijing earlier this month, U.S. House Speaker Nancy Pelosi met with Mark Liu, chairman of Taiwan Semiconductor Manufacturing Co., the world’s biggest chipmaker.

Pelosi delivered all but one Democratic vote in the House of Representatives for the CHIPS Act. “Mr. President with the stroke of your pen, America declares our economic independence,” she said in her remarks Tuesday. “We strengthen our national security, and we enhance our family’s financial future.”

Following Pelosi’s Taiwan visit, Beijing halted key communication channels with Washington and conducted live-fire military drills, raining Dongfeng ballistic missiles into the waters near Taiwan’s eastern, southern, and northern coasts.

While most experts don’t believe a war over Taiwan is imminent, many fear a conflict there would disrupt semiconductor production and have disastrous effects on global manufacturing.
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Offshore wind farms are to be permitted for the first time in Australia. The Climate Change Minister Chris Bowen has declared part of the Victoria coast an offshore wind zone and a 60-day community consultation process will soon begin.

The Australian government has designated the country’s first offshore wind zone, which gives developers permission to increase their planning and consultation for wind farm projects.

Australia currently has no offshore wind generation, which was seen as too expensive and hard to build compared to onshore wind or solar projects.

The Climate Change Minister Chris Bowen says there is no time to lose.

“We are way behind the game, way behind the rest of the world in producing wind off our coastline. Again, we have a lot of catching up to do. Offshore wind is jobs-rich and energy-rich,” he said.

The first official offshore wind zone is off the Gippsland coast in the state of Victoria. There are plans to install up to 200 wind turbines, with the closest located 7 kilometers from the coastline. It would be one of the world’s largest wind farms. Construction could begin in 2025.

Other areas will follow off the coasts of New South Wales, Tasmania and Western Australia.

Erin Coldham, the acting chief executive of the Danish-owned Star of the South wind project in the Bass Strait in Victoria, says the project will help reduce Australia’s reliance on fossil fuels.

“In the region where we are looking to put a project in Gippsland, it is a region that has been generating power for over 100 years and been working in the offshore oil and gas business. But those communities know those opportunities will not be around forever. So, there is a really strong sense of enthusiasm for technologies like offshore wind to continue that tradition into the future,” said Coldham.

Wind turbines have been identified as a key part in Australia’s plan to generate more than 80% of its energy needs with renewable sources by 2030.

In 2020, 24% of Australia’s electricity came from renewable energy, up from 21% in 2019.

Solar is Australia’s largest source of green power. A quarter of Australian homes have rooftop solar systems — the highest uptake in the world.

But despite this, Australia has been one of the world’s worst per capita emitters of greenhouse pollution. Coal and gas still generate most of its electricity. Analysts have said that for years it has been regarded as a climate laggard.

But that perception is now changing.

For the first time, Australia has a legislated target to cut greenhouse gas output.

Last week, new laws were passed by the federal parliament in Canberra that will cut carbon emissions by 43% by 2030.

 
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President Joe Biden virtually joined Michigan Governor Gretchen Whitmer Tuesday to celebrate the CHIPS and Science Act, which aims to boost U.S. competitiveness against China by allocating billions of dollars toward domestic semiconductor manufacturing and scientific research.

“This bill makes it clear the world’s leading innovation will happen in America. We will both invent in America and make it in America,” Biden said. He was scheduled to join the event in person but had to remain in isolation after testing positive for COVID-19 again on Saturday in what his physician described as a “rebound” case.

In the coming days, Biden is expected to sign the legislation, which passed in a 243-187 vote in the House of Representatives and 64-33 vote in the Senate last week.

The $280 billion act includes $52 billion in incentives for domestic semiconductor production and research, as well as an investment tax credit for semiconductor manufacturing. Advocates say it will allow the U.S. to catch up in the global semiconductor manufacturing race currently dominated by China, Taiwan and South Korea.

Last year, a semiconductor shortage affected the supply of automobiles, electronic appliances and other goods, causing higher inflation globally and pummeling Biden’s public approval among American voters.

Michigan, a major hub for the American auto industry, has been one of the states hardest hit by the semiconductor shortage.

“This bill will mean humming factories and lower costs on electronics, medical devices, farm equipment and cars for working families,” Whitmer said.

The act includes $4.2 billion to fund defense initiatives and the U.S. mobile broadband market, particularly efforts to promote non-Chinese 5G equipment manufacturing.

Catching up with China

The U.S. share of global semiconductor manufacturing capacity has decreased from 37% in 1990 to 12% today, largely because other governments have offered manufacturing incentives and invested in research to strengthen domestic chipmaking capabilities, according to a state of the industry report by the Semiconductor Industry Association.

Now China accounts for 24% of the world’s semiconductor production, followed by Taiwan at 21%, South Korea at 19% and Japan at 13%, the report said.

With the CHIPS Act, the administration hopes to bring as much semiconductor manufacturing to the U.S. as practically possible, said Bonnie Glick, director of the Krach Institute for Tech Diplomacy at Purdue University.

“And what can’t be reasonably onshore, either because it’s cost prohibitive or other allied countries simply do it better, we can ally-shore manufacturing and support that,” she told VOA.

The two allies the administration has leveraged are South Korea and Japan, both of which Biden visited in May. In Seoul, he toured a Samsung computer chip factory that is the model for a $17 billion facility that the South Korean technology giant is setting up in the U.S. state of Texas.

Last week, the U.S. and Japan launched a new joint international semiconductor research hub under a “bilateral chip technology partnership” to bolster manufacturing for 2-nanometer chips as early as 2025.

Washington has also persuaded Taiwan Semiconductor Manufacturing Ltd. (TSMC) to open a U.S. foundry to produce advanced semiconductors. The $12 billion facility in the state of Arizona was completed last month and is scheduled to start production of 5 nm chips by 2024. TMSC also has plants in China.

“We’re back in the game,” Biden said Tuesday. “Remember, we invented these chips, we modernized these chips, we made them work, and there’s a lot more we can get done.”

The CHIPS Act has laid out a clear strategy for Washington, said Volker Sorger, director of the Devices & Intelligent Systems Laboratory at the George Washington University.

“Gain autonomy and eliminate political dependencies on these global supply chain values,” Sorger told VOA.

That strategy puts the U.S. on a collision course with China, which also aims to be the global leader in semiconductors. In 2015, Beijing launched the Made in China 2025 project, which aimed to increase chip production from less than 10% of global demand at the time to 40% in 2020 and 70% in 2025.

The Made in China 2025 program and the People’s Liberation Army’s goal of military-civil fusion make it “overtly clear that Beijing is seeking to dominate global technology and supply chains through anti-competitive trade practices and infiltration of dual-use technology research,” Glick said.

The U.S. government has been pushing for stricter export regulations to China by prohibiting export of equipment needed for manufacturing chips at 14 nm and below. “That would mark an escalation from the previous ban covering 10 nm and below,” Glick added.

Taiwan’s strategic importance

Taiwan — a self-governed island that Beijing claims to be its breakaway province — lies at the heart of the increasingly tense U.S.-China rivalry.

Taipei has dominated manufacture of the world’s most high-tech chips, accounting for 92% of the global production of 10 nm or smaller semiconductors, essentially creating what some observers have characterized as a “silicon shield” that ensures American support in the event of a Chinese attack, as well as a deterrence to such a move.

A military conflict over Taiwan could disrupt TMSC’s semiconductor production and have disastrous effects on global manufacturing.

U.S.-China tensions are already spooking technology investors. TSMC shares fell nearly 3% on Tuesday as U.S. House of Representatives Speaker Nancy Pelosi landed in Taipei in a visit she said demonstrated American solidarity with the Taiwanese people.

Beijing has condemned the visit, the first by a U.S. House speaker in 25 years, as a threat to peace and stability in the Taiwan Strait.

Rare earths

The CHIPS Act does not include provisions to secure supply chains of rare earths — and other critical minerals used in semiconductors and other high-tech elements — to reduce the nation’s dependence on China, a major producer of these elements.

“I don’t know that we have developed a coherent strategy on accessing both rare and nonrare elements,” Glick said.

Last June, following Biden’s executive order to improve supply chains, the administration released a report concluding that the U.S. was overly reliant on China for critical minerals. Currently, China controls 87% of the global permanent magnet market, 55% of rare earths mining capacity and 85% of rare earths refining.

Earlier this year, the administration announced actions it said would bolster the supply chain of these elements, including a contract for U.S. company MP Materials to process heavy rare earth elements at its California production site — the first processing and separation facility of its kind in the nation.  
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US President Joe Biden virtually joined Michigan Governor Gretchen Whitmer on Tuesday to celebrate the CHIPS and Science Act, which aims to boost US competitiveness against China by allocating billions of dollars toward domestic semiconductor manufacturing and research. White House Bureau Chief Patsy Widakuswara has this report.
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Kenyan ministers said the government has no intention of banning Facebook despite a watchdog last week accusing the social media platform of failing to stop hate speech ahead of Aug. 9 elections.

Kenya’s National Cohesion and Integration Commission (NCIC) last week gave Facebook one week to comply with regulations against ethnic hate speech or risk suspension.

The threat came after a report by rights group Global Witness said Facebook approved hate speech advertisements that promoted ethnic violence ahead of the election.

But Kenya’s Interior Cabinet Secretary Fred Matiangi accused the NCIC of making what he termed a careless decision on the matter.

He assured the public that the platform would not be shut down.

Kenya’s Minister of Information and Technology Joe Mucheru echoed that vow to VOA in a telephone interview Monday.

He said while the issues raised were valid, they did not warrant blocking Facebook.

“That is not within our legal mandate, and we have been working with Facebook and many other platforms,” Muchera said. “Facebook for example has in this electioneering period has deleted over 37,000 inflammatory comments.”

In a statement last week, Facebook admitted having missed hate speech messages in Kenya, where national data shows an estimated 13 million users of the platform.

A spokesperson for Facebook’s parent company, Meta, blamed human and machine error for missing some inflammatory content and said they had taken steps to prevent such content.

Kenya’s cohesion commission said this year’s election had seen less in-person hate speech as it migrated from political rallies to social media.

It said the main perpetrators were followers of Kenya’s two leading presidential candidates — former Prime Minister Raila Odinga and Deputy President William Ruto.
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