Moving Semiconductor Packaging Plants Out of China Would Be Costly, Intel Tells USTR

It's not easy or cheap relocating semiconductor packaging plants from China to other countries of origin to avoid tariffs, Intel said in comments posted July 25 in docket USTR-2018-0018 opposing the proposed 25 percent Section 301 duties on Chinese semiconductor imports. Many tech interests argued this week for removing Chinese semiconductor imports from the tariffs list because most semiconductors the U.S. imports are made in the U.S., shipped to China for final, low-end assembly, testing and packaging (ATP), and then shipped back to the U.S. (see 1807240045). Imposing those duties would require U.S. semiconductor manufacturers to pay tariffs on their own products, they said. Though U.S. firms can limit or avoid their exposure to Chinese tariffs by moving their ATP plants elsewhere, "no rational U.S. semiconductor company is going to incur the very high costs and other risks raised by relocating an ATP facility in China with an already established ecosystem to a green field site in another country,” Intel said. It estimates it would cost anywhere from $650 million to $875 million to move an ATP plant out of China, “depending on its size and where it would be relocated,” it said.