SEMI supports U.S. return to trade talks with China, issues trade negotiation principles

Nov. 9, 2018

MILPITAS, CASEMI, the global industry association serving the electronics manufacturing supply chain, today voiced support and encouragement for trade discussions between U.S. President Donald Trump and People’s Republic of China President Xi Jinping—talks that are planned for Dec. 1 during the G20 Summit in Argentina. Representing the semiconductor industry end-to-end, from chip design through manufacturing, SEMI expressed hope for a deal and offered principles beneficial to the global microelectronics manufacturing supply chain.

“With SEMI members being key enablers of the more than $2 trillion electronics manufacturing supply chain, SEMI has a clear foundational mission based on free and fair trade, open markets, and support for international laws governing IP, cybersecurity and national security,” said Ajit Manocha, SEMI president and CEO. “Adhering to these principles benefits all SEMI member companies and the global ecosystem of industries and applications enabled by semiconductor manufacturing. I commend our global government leaders for returning to the negotiating table.”

Recent tariffs and trade tensions, on top of newly imposed and rumored export controls, have complicated the global electronics manufacturing supply chain, forcing many SEMI member companies to rethink their investment strategies. Over the past six months, SEMI has testified that tariffs threaten to undercut the ability of many SEMI members to sell overseas by increasing costs, stifling innovation, and curbing U.S. technological leadership.

SEMI continues to educate U.S. lawmakers, as well as governments worldwide, about the critical importance of free and fair trade, open markets, and respect and enforcement of IP for all players in the global electronics manufacturing supply chain. As part of this initiative, SEMI is providing the 10 Principles for the Global Semiconductor Supply Chain in Modern Trade Agreements below to government officials and encouraging them to include these guidelines in forward-looking agreements.

These core principles outline the primary considerations for balanced trade rules that benefit SEMI members around the world, strengthen innovation and perpetuate the societal benefits of affordable microelectronics – essential components in all advanced communications, computing, transportation, healthcare and consumer electronics.

10 Principles for the Global Semiconductor Supply Chain in Modern Trade Agreements

1. Affirm principles of nondiscrimination.
Non-discriminatory treatment is a central tenet of the global trading system. SEMI strongly believes that any trade deal should provide that all products from a party to the deal cannot be put at a competitive disadvantage in any other party’s market. Related, any agreement must be fully compliant with the World Trade Organization’s rules.

2. Maintain strong respect for intellectual property and trade secrets through robust safeguards and significant penalties for violators.
Protection for intellectual property are essential for the semiconductor industry. These standards enable the ability to innovate and grow. SEMI supports robust copyright standards, strong patent protections, and regulations that safeguard industrial design. SEMI also strongly supports rules that preserve trade secrets protection, including establishing criminal procedures and penalties for theft, including by means of cyber theft.

3. Remove tariffs and end technical barriers on semiconductor products.
Parties should eliminate tariffs and technical barriers on semiconductors and all technology products, that rely on electronic chips. Removing tariffs and technical barriers is crucial for businesses, especially for small and medium-sized enterprises, in penetrating new markets. Related, any trade deal should open markets for services providers, ensuring that all face fair and transparent treatment.

4. Simplify and harmonize the customs and trade facilitation processes.
The trade deals should include strong commitments on customs procedures and trade facilitation to ensure that border processing will be quick, transparent, and predictable. The parties should also work to use electronic customs forms to expedite customs processing.

5. Combat any attempts of forced technology transfer.
All trade deals should have clear and firm rules that prohibit countries from requiring companies to transfer their technology, intellectual property, or other proprietary information to persons in their respective territories.

6. Enable the free flow of cross-border data.
In today’s global economy, all industries, including the semiconductor industry, rely on the free flow of data. Countries should refrain from putting in place unjustifiable regulations that limit the free flow of information, which simply serve to curb innovation and impact growth. SEMI supports provisions that enable the movement of data, subject to reasonable safeguards for privacy and other protections.

7. Eliminate forced data localization measures.
Many countries have created laws that require physical infrastructure and data centers in every country they seek to serve, which adds unnecessary costs and burdens. Forward-looking policies should eliminate the use of forced data localization measures.

8. Harmonize global standards to achieve “one standard, one test, accepted everywhere.”
Businesses should not have to face different standards for each market they serve. Global standards, driven by industry, should be market-oriented, and there should be strong commitments on transparency, stakeholder participation and coordination.

9. Create transparent rules for state-owned and -supported enterprises to ensure fair and non-discriminatory treatment.
SEMI supports a trade deal that contains robust commitments to ensure that state-owned and -supported enterprises compete based on performance, quality and price, as opposed to discriminatory regulation, opaque subsidies, favoritism, or other tools that artificially benefit state-backed businesses.

10. Establish protections for companies and individuals that respect privacy while also balancing security.
Any trade deal should have firm consumer protections, including privacy, that enables ease of use, but also does not forgo security. SEMI support efforts to use encryption products in support of this venture and also believes that parties should work to advance efforts on cybersecurity through self-assessment, declaration of conformity, increased cooperation and information sharing, all of which will help prevent cyber-attacks and stop the diffusion of malware.

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