White House Proposes '1:1 Rule' to Boost US Chip Manufacturing
The new policy aims to reshore semiconductor production by requiring companies to match domestic output with imports or face significant tariffs.
The White House is considering a significant policy shift aimed at bolstering the domestic semiconductor industry, proposing a '1:1 rule' that would compel chipmakers to match their US production with the volume of chips they import. This move, designed to reduce reliance on foreign supply chains and reshore critical manufacturing, could provide a substantial tailwind for US-based producers and has already sent ripples through the sector.
The proposed rule would require companies to produce one chip domestically for every chip they import, or face steep penalties, . This aggressive stance is seen as a move to incentivize investment in American manufacturing facilities and strengthen national economic security. To ease the transition, the proposal reportedly includes provisions for companies that commit to building new US plants, offering them 'credits' to import chips tariff-free until their domestic operations are up and running.
This initiative builds upon the foundation of the , which has already allocated billions of dollars in subsidies and tax credits to stimulate domestic semiconductor research and production. The '1:1 rule' would represent a more direct and forceful approach to achieving the same long-term goal of a robust, self-sufficient American chip industry.
News of the proposed policy has been met with a mixed but generally positive reaction from the market. Companies with significant US manufacturing footprints, such as Intel (INTC), saw their shares trade up on the news, with Intel rising 4.4% on elevated volume. The policy is expected to benefit such companies by creating a more favorable competitive landscape. However, industry analysts have raised concerns about the practical challenges of implementing such a rule, citing the complexity of global supply chains and the difficulty in counting and classifying the vast array of semiconductor types. .
The ultimate impact of the '1:1 rule' will depend on the final details of its implementation, including how different types of chips are weighted and the timeline for compliance. While the policy has the potential to reshape the global semiconductor landscape and create significant opportunities for domestic producers, it also introduces a new layer of complexity and uncertainty for an industry that is already navigating a challenging geopolitical environment. to finance the construction of new fabrication plants on US soil.