Industrial Policy & Trade Monitor· 2663 actions· ✨ 89 recent

On 1 February 2026 Finance Minister Nirmala Sitharaman, presenting the Union Budget 2026-27, announced the launch of India Semiconductor Mission (ISM) 2.0 — the second-phase national semiconductor industrial-policy framework succeeding ISM 1.0 (2021, INR 76,000 crore). The Budget makes an initial INR 1,000 crore provision for ISM 2.0 in FY 2026-27 and raises the Electronics Components Manufacturing Scheme (ECMS) outlay from INR 22,919 crore to INR 40,000 crore. ISM 2.0's distinct architecture centres on four strategic priorities not in ISM 1.0: (i) indigenous semiconductor equipment, chemicals, gases and materials production, (ii) full-stack Indian semiconductor IP design, (iii) industry-led R&D and skills/training centres, and (iv) domestic and global supply-chain integration. Total mission outlay reported as approximately INR 1-1.2 lakh crore (~USD 12-14bn) is being finalised; Cabinet clearance and the formal scheme launch are expected by mid-2026.

At the APEC Busan summit on 30 October 2025, Presidents Trump and Xi reached the "Economic and Trade Arrangement Between the United States and the People's Republic of China," subsequently implemented on the US side by the executive order "Modifying Reciprocal Tariff Rates Consistent with the Economic and Trade Arrangement" (issued 4 November 2025; effective 12:01 am EST on 10 November 2025; published in the Federal Register on 7 November 2025 as 90 FR 50729 / 2025-19826) and on the Chinese side by a series of MOFCOM and State Council Tariff Commission announcements (notably MOFCOM 2025 No. 90 of 8–9 November 2025). The arrangement is structurally parallel to the already-filed US-Japan, US-Korea and US-Taiwan framework deals but uniquely material because it freezes the highest-stakes bilateral tariff and export-control confrontation of the post-2024 reset. Core US commitments: (i) reciprocal-tariff "additional ad valorem rate of duty" on PRC-origin goods reduced from a prior 20% IEEPA-fentanyl + 10% IEEPA-reciprocal stack to a 10% rate (i.e., the prior 24% / 34% scheduled escalation is suspended), extended through 10 November 2026; (ii) US BIS suspends the so-called "affiliates rule" expanding entity-list controls to majority-owned subsidiaries of listed Chinese firms; (iii) USTR pauses Section 301 maritime / shipbuilding / logistics countermeasures against Chinese vessels for one year. Core PRC commitments: (i) MOFCOM suspends for one year (until 10 November 2026) the 9 October 2025 extraterritorial rare-earth export-control package — including controls on REE processing equipment, lithium-battery manufacturing equipment, and superhard materials; (ii) PRC suspends retaliatory tariffs on a broad swath of US agricultural products through 31 December 2026; (iii) commitment to purchase ≥25 million metric tonnes of US soybeans annually in 2026-2028 and to resume sorghum and log imports; (iv) suspension of MOFCOM antitrust and "unreliable-entity" probes against named US semiconductor and chip-equipment companies; (v) cooperation on fentanyl precursor enforcement. The arrangement does not repeal underlying authorities (IEEPA tariffs, MOFCOM export-control list, Entity List) — it is a calibrated mutual freeze with a one-year sunset and quarterly review checkpoints.

The US Bureau of Industry and Security issued its largest single export-control package targeting China's semiconductor industry on 2 December 2024, with three layered measures (final rules published in the Federal Register 5 December 2024). First, controls on high-bandwidth memory (HBM) above set performance thresholds — blocking the memory architecture that is foundational to AI training. Second, additions of 24 semiconductor manufacturing equipment item types to the Commerce Control List, covering deposition, etch, ion- implant, advanced packaging, and metrology categories. Third, Entity List designations for 140+ entities, the bulk Chinese semiconductor companies + equipment makers + investment vehicles, including major Chinese fab tooling firms. The package triggered MOFCOM's same-day-following retaliation (filed: 2024-12-03-china-mofcom-ge-ga-sb-export-ban-us).

The US Bureau of Industry and Security issued a final rule on 5 September 2024 (effective 6 September 2024, published in the Federal Register on the same day as 89 FR 73285) establishing multilateral export controls on four categories of emerging technologies: (1) quantum computing items including quantum computers, related cryogenic / control / measurement systems, and certain quantum software; (2) gate-all-around field-effect transistor (GAAFET) production technology — the next-node semiconductor architecture beyond FinFET; (3) advanced additive-manufacturing equipment for metals + alloys; (4) certain biotech-related items added in a parallel rule on 12 September 2024. The rule operates without country exceptions for some categories, with multilateral coordination via Wassenaar + Australia Group + Nuclear Suppliers Group frameworks.

Prime Minister Anwar Ibrahim launched Malaysia's National Semiconductor Strategy (NSS) on 28 May 2024 in his keynote at SEMICON Southeast Asia, with implementation led by MITI. The NSS commits at least RM25 billion (~USD 5.3 billion) in fiscal support over a ten-year horizon and structures the chip industrial policy in three sequential phases: (1) shoring up Malaysia's existing strength in outsourced semiconductor assembly and test (OSAT) and back-end packaging, (2) moving domestic firms into integrated-circuit (IC) design, advanced packaging and advanced manufacturing equipment, and (3) developing Malaysian-owned global champions across the chip value chain under a "Made by Malaysia" framing. Headline targets include developing 10 local design and advanced- packaging companies with revenues between RM1 billion and RM4.7 billion, 100 broader semiconductor-related companies near the RM1 billion revenue mark, and training 60,000 high- skilled engineers. The RM25 billion envelope decomposes into RM5 billion in tax forgone over five years, RM2 billion for existing capital grants, RM1.25 billion for an HRD Fund semiconductor allocation, RM2 billion for a Semiconductor Industrial Park, RM1.59 billion for an Advanced Packaging Centre, plus RM2 billion each for the National Energy Transition Facility and Green Tech Financing Scheme. By June 2025, the government reported RM70.7 billion in announced investments attracted under the NSS umbrella.

On 25 October 2023 the Bureau of Industry and Security published an interim final rule (88 FR 73424; FR Doc 2023-23055) making substantive revisions to the October 7 2022 advanced-computing IFR, incorporating 43 public comments covering 78 topics. The rule replaced the prior TOPS-based performance metric with a new "Total Processing Performance" (TPP) / performance-density dual-threshold structure for ECCN 3A090, splitting the control into tiers 3A090.a (full licence requirement for highest-capability datacenter AI chips) and 3A090.b (new License Exception NAC with 25-day prior notification for the intermediate tier). Geographic scope was expanded from China-and-Macau to Country Groups D:1/D:4/D:5 to block diversion via third-country intermediaries and offshore datacenters.

The US Bureau of Industry and Security issued an interim final rule on 17 October 2023 that substantially expanded the advanced-computing and semiconductor manufacturing controls first imposed in October 2022. The rule closed the performance-threshold workaround that NVIDIA had used to ship China-specific A800/H800 GPUs, replacing it with a "performance density" metric and adding a new "Notified Advanced Computing" licence category. It expanded controls on chipmaking equipment (additional ECCNs covering deposition, etch, metrology), pulled 21 additional countries (mostly Middle East / Central Asia) into a regional licensing scheme to prevent transshipment, and added 13 Chinese entities to the Entity List including AI-chip designers.

The Dutch government announced on 30 June 2023 a new national export-licensing requirement covering specific advanced semiconductor manufacturing equipment, most prominently ASML's TWINSCAN NXT:2000i and subsequent DUV immersion lithography systems used at ≤14/16nm logic, advanced DRAM, and advanced 3D NAND production. Effective from 1 September 2023 via the national Strategic Goods Decree, the rule completes the trilateral US-Japan-Netherlands chip-equipment perimeter initiated by the January 2023 trilateral agreement. Although nominally country-neutral, the BIS Foreign Direct Product Rule means licences for shipments to "countries of concern" — read: China — face a presumption of denial. Subsequent guidance in 2024 expanded coverage to additional TWINSCAN NXT:1970Ci and 1980Di system variants.

The Korean National Assembly passed an amendment to the Restriction of Special Taxation Act (조세특례제한법, Act No. 19234) on 30 March 2023, promulgated 31 March 2023 and retroactive to 1 January 2023. The amendment enhanced the investment tax credit (ITC) for "national strategic technology" (국가전략기술) semiconductor facility investment: large companies receive a 15% ITC on qualifying capital expenditure (up from 8% in the December 2022 base version); small and medium enterprises receive 25%. An additional temporary 10% incremental credit applies for annual investment exceeding the prior 3-year average (effective 2023-2025). Internationally termed the "K-Chips Act," the measure directly mirrors the US CHIPS Act's 25% advanced- manufacturing investment tax credit. Principal beneficiaries are Samsung Electronics (Samsung Foundry plus DRAM/NAND capex of KRW 20-30 trillion per year) and SK Hynix (memory fabs at Icheon and Cheongju, HBM expansion). In the same session the National Assembly passed companion legislation on secondary-battery (EV) investment with equivalent credit rates. The Korean government projected annual tax savings for the semiconductor sector of approximately KRW 1-2 trillion.

BIS published an interim final rule on January 18, 2023 (88 FR 2821, FR Doc 2023-00888) extending to Macau the same advanced computing and semiconductor manufacturing controls originally imposed on China by the October 7, 2022 rule. The extension closes a diversion loophole created by Macau's status as a Special Administrative Region of China, applying equivalent license requirements for advanced computing ICs, equipment used in ≤14 nm logic and advanced NAND/DRAM fabrication, and supercomputer end-use restrictions. The rule also includes entity list modifications and took effect one day before Federal Register publication (January 17, 2023).

The US Bureau of Industry and Security imposed broad new controls on the export of advanced computing chips, chipmaking equipment, and US-person services supporting Chinese semiconductor fabrication. The October 7 2022 rule blocked supply of GPUs above set performance thresholds (initially 600 GB/s interconnect / 4800 TOPS) to China and added end-use restrictions on manufacturing tools used in advanced (≤14/16 nm logic, ≤18 nm DRAM, ≤128-layer NAND) facilities, with a foreign direct product rule extending coverage globally.

The Bureau of Industry and Security (BIS) added 31 Chinese entities — including Yangtze Memory Technologies Co., Ltd. (YMTC), China's largest NAND flash manufacturer — to the Unverified List (UVL), suspending license exceptions and requiring end-user statements for all EAR-controlled items destined to these parties. BIS simultaneously removed nine Chinese entities previously on the UVL after successfully completing end-use checks. The rule also established a new 60-day UVL-to-Entity-List escalation clock and clarified that sustained host-government obstruction of end-use checks constitutes independent grounds for Entity List designation — a structural enforcement change aimed at closing China's pattern of blocking BIS post-shipment verification visits.

The CHIPS and Science Act (Public Law 117-167), signed into law by President Biden on 9 August 2022, appropriated $52.7 billion in direct semiconductor industry support: $39B in manufacturing incentives administered by the Commerce Department, $13.2B for R&D and workforce, and $0.5B for legacy-chip and supply-chain programs. It also created an Advanced Manufacturing Investment Credit (Section 48D) — a 25% refundable investment tax credit on qualified semiconductor manufacturing property. The law included a "guardrails" clause prohibiting recipients from expanding advanced-node capacity in countries of concern (most prominently China) for 10 years following award.

Effective 24 February 2022 — the date of Russia's full-scale invasion of Ukraine — the US Bureau of Industry and Security (BIS) published an interim final rule (87 FR 12226, FR Doc 2022-04300) adding sweeping new export license requirements under a new § 746.8 of the Export Administration Regulations (EAR). The rule requires a licence for any item in CCL Categories 3–9 (electronics, computers, telecommunications, sensors, lasers, navigation/avionics, marine, aerospace, propulsion) exported, reexported, or transferred to Russia, with a review policy of denial. Two new Russia-specific Foreign Direct Product (FDP) rules extend US jurisdiction to foreign-manufactured goods: the Russia FDP Rule (§ 734.9(f)) covers all foreign-made items using US technology/equipment destined for Russia, and the Russia-MEU FDP Rule (§ 734.9(g)) covers items destined to 47 designated military-end-user (MEU) entities with no licence exceptions available. All three restrictions carry a presumption of denial, making this the most sweeping peacetime expansion of the EAR since its modern codification.

The Union Cabinet approved the Semicon India Programme on 15 December 2021, establishing the India Semiconductor Mission (ISM) as the nodal agency. The programme offers fiscal support of up to 50% of project cost for silicon semiconductor fabs, compound semiconductor facilities, display fabs, ATMP/OSAT units, and chip design. Total outlay: Rs 76,000 crore (approximately $10.2bn at 2021 exchange rates). By February 2024, the Cabinet had approved three major semiconductor units under ISM: Tata Electronics with PSMC (semiconductor fab, Dholera, Rs 91,526 crore), Tata Electronics OSAT (Morigaon, Assam, Rs 27,120 crore), and CG Power OSAT (Rs 7,584 crore), totalling over Rs 1.26 lakh crore in committed investment from private applicants.

The Bureau of Industry and Security added 77 entities (under 78 entries) to the Entity List via a December 22, 2020 final rule (FR Doc 2020-28031). The headline designation is Semiconductor Manufacturing International Corporation (SMIC) — China's largest contract chipmaker — for activities related to military-civil fusion (MCF), with a presumption of denial applied to all items uniquely required to produce chips at advanced nodes of 10 nanometers or below. The batch also covers entities that supported PRC militarisation of artificial islands in the South China Sea and entities implicated in human rights abuses against Uyghurs and other minorities in Xinjiang.