by Semiconductor Industry Association
Following a key breakthrough between China and the United States on the sidelines of the APEC Leaders meeting in Beijing in November, negotiators have returned to Geneva to resume, and hopefully conclude, an expanded Information Technology Agreement that extends duty-free coverage to approximately 200 new technology product lines.
Included on this list of new products are next generation semiconductors known as multicomponent semiconductors (MCOs). MCOs are the latest evolution in semiconductor technology driven by consumer demand for greater functionality, performance, and miniaturization. Simply put, an MCO is a single semiconductor device that performs complex or multiple functions previously done by two or more semiconductor devices, thanks to a variety of components integrated into a single unit.
Duty-free treatment for MCOs via ITA expansion has been a top priority for the global semiconductor industry for many years. Eliminating tariffs on MCOs will save the global semiconductor industry $150-300 million in tariffs annually, with this number only set to grow as global consumer demand for MCOs grows.
However, the benefits of MCOs and the ITA are far more extensive than just tariff savings for manufacturers of MCOs. An expanded ITA that includes MCOs will benefit nearly everyone: semiconductor designers, assembly and test operations, downstream electronics industries, service industries that rely on technology, developing countries, developed countries, customers of electronic goods, and society as a whole.
Below is an illustrative list of the many benefits of duty-free treatment of MCOs via ITA expansion. We hope that ITA parties embrace these and other benefits of ITA expansion, and limit product sensitivities so an ambitious result can be achieved when talks recommence next week in Geneva.
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