The state-backed China Semiconductor Industry Association (CSIA) informed its members on Friday, citing customs regulations, that the place of origin for chips is determined by the location of wafer fabrication – a key process in the chip supply chain alongside chip design, packaging and testing. Regardless of whether the chips are packaged or unpackaged, IC products should declare the wafer fabrication facility’s location as the origin when reporting imports, according to the notice.
The change has implications for the US semiconductor industry. The rule from China, the world’s largest IC market, could increase the cost of chips from fabs on American soil, which could persuade fabs to set up facilities outside the US, according to a research note by ICWise, a Shanghai-based consultancy.
The research note argued that Trump’s tariffs would fail to achieve the goal of “making America great again”, as they would instead only “make America outsource again”.
The change comes amid an escalating tariff war between the US and China. China’s Ministry of Finance announced that it would increase tariffs on US products to 125 per cent from 84 per cent, effective on Saturday, to match Trump’s tariffs.
