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.
Defining the “origin” of chips based on the “last substantial transformation” could encourage chip developers to process their products at local foundries. Hong Kong-listed shares rose 5.9 per cent on Friday, while the share price of Hua Hong, China’s second-largest foundry, surged 14 per cent.
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.
Their anxiety spread on official investor relations platforms and in online communities, with questions directed to Shanghai- and Shenzhen-listed firms about the exact impact of the trade war on company finances and proposed remedial measures.
A former adviser to China’s central bank has voiced grave concerns over the safety of the country’s overseas assets