US-China ITA deal to keep semicon costs down for consumers, says SIA

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KUALA LUMPUR (Nov 12): The deal between the US and China to expand the Information Technology Agreement (ITA), a key trade pact that promotes fair and open trade by providing for duty-free treatment of certain information and communications technology (ICT) products, including semiconductors would strengthen the semiconductor and keep costs down for consumers, according to the US-based Semiconductor Industry Association (SIA).

In a statement on its website Nov 11, the SIA said that following negotiations on the sideline of the Asia-Pacific Economic Cooperation (APEC) Leaders’ meeting in Beijing, US President Barack Obama announced a bilateral agreement on the product scope of an expanded ITA that includes next generation semiconductors, static converters and inductors, and an array of technology products including medical devices, GPS devices, software media, ICT testing instruments, and others.

It said this breakthrough bilateral agreement would enable all negotiators to return to Geneva to finalize a pluri-lateral ITA deal, with full talks targeted for December.

SIA president and CEO Brian Toohey said the ITA has played a central role in helping the U.S. semiconductor industry drive innovation, create jobs, lower consumer prices and connect communities throughout the world.

“Today’s agreement between the U.S. and China to expand the ITA is a hard-fought victory for the U.S. semiconductor industry and a big win for the U.S. economy and consumers around the world.

“We look forward to all ITA countries finalizing a deal as soon as possible.” 

The SIA said an expanded ITA – with an estimated value of over $1.4 trillion of annual world trade – represents one of the most valuable agreements for the global high tech industry in nearly two decades.

It provides the first opportunity to include newly developed products resulting from the dynamic technological developments in the information technology sector since 1996, when the ITA was originally concluded, said the SIA.

The industry association said U.S. negotiators sought expanded coverage for new and innovative semiconductor products, including multi-component semiconductors (MCOs).

“MCOs comprise a growing share of the global semiconductor market, and will be key to continued growth and innovation in a vast range of downstream products, services, and sectors, providing the basis for much needed economic growth and jobs.

“Inclusion of MCOs in an expanded ITA would save the industry $150 to $300 million in global annual tariffs. U.S. semiconductor companies stand to benefit significantly from expanding the ITA, given that semiconductors are one of America’s top exports,” it said.  

Toohey said expanding the ITA to keep pace with the latest technologies would fuel foreign and domestic semiconductor design and manufacturing investments, reduce costs for consumers, promote exports, and strengthen overall semiconductor sector development and growth.