Semiconductors and Components

IT Agreement Expected to Strengthen Chip Industry

13 November 2014

The Semiconductor Industry Association (SIA) lauded the decision of the Chinese and United States governments to expand the Information Technology Agreement (ITA) calling it a hard-fought victory for the U.S. semiconductor industry.

The ITA is a key trade pact that promotes fair and open trade by providing duty-free treatment of certain information and communications technology products including semiconductors. The agreement was long sought after by the SIA that will expand the scope of the ITA to include next generation semiconductors, static converters and inductors as well as other technology products such as medical devices, GPS, software, communications testing instruments and much more. The finalization of the deal is expected in December in Geneva, Switzerland.

“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,” said Brian Toohey, president and CEO, Semiconductor Industry Association, in a statement. “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.”

According to the SIA, the expansion of the agreement will result in an estimated value of more than $1.4 trillion of annual world trade. It is considered one of the most valuable agreements for the global high tech industry in nearly two decades, the SIA said. More importantly, the deal will allow newly developed products to be included for the first time since the ITA was originally concluded in 1996.

Toohey said the expansion of the ITA will “fuel foreign and domestic semiconductor design” as well as “reduce costs for consumers, promote exports” and go a long way to strengthen overall chip growth.

The expansion of the agreement was important because of the inclusion of new chips such as multi-component semiconductors (MCOs), the SIA said. MCOs are a growing segment of the chip market and are considered a key component to growth in downstream products, services and sectors, something needed for economic growth and jobs. The SIA said the inclusion of MCOs in the ITA will save the industry $150 million to $300 million in global annual tariffs, a significant savings to chip companies exporting semiconductors.

Related links:

IHS Semiconductors & Components

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