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Deal to expand Information Technology Agreement will strengthen semiconductor industry, eliminate tariffs on next generation semiconductors

Agreement between U.S., China will extend tariff-free coverage of the latest semiconductor technologies

Nov 11, 2014

Texas Instruments (TI) (NASDAQ: TXN) today applauded the announcement of a long awaited breakthrough to expand the Information Technology Agreement (ITA). 

The expansion of this agreement will cover new products including multicomponent semiconductors (MCOs), which comprise a growing share of the global semiconductor market. 

“Lowering barriers to trade advances innovation and growth for our companies but more importantly can expand the global economy,” said Rich Templeton, TI’s chairman, president and CEO. “We see this as a true win-win for the participating countries and a needed boost for rules-based trade under the WTO. President Obama and Ambassador Froman deserve a great deal of credit for achieving this important breakthrough.” 

The Semiconductor Industry Association estimates that the inclusion of MCOs will save the industry $150-$300 million in global annual tariffs. The ITA will also reduce tariffs on a wide range of end products powered by chips such as medical devices, GPS systems, CT scanners, MRIs, game consoles and others.  

Since 1997 when the agreement went into effect, exports of  information and communications technology (ICT) products has grown from $1.2 trillion to over $5 trillion in 2014.  Over this time, the ITA has facilitated the formation of efficient global ICT supply chains and played a critical role in promoting ICT trade and investment.  This has driven innovation, boosted productivity, spurred new industries and companies, stimulated job growth and accelerated global economic growth. 

The agreement is expected to be finalized at an upcoming meeting in Geneva later this year. For additional background information about the new agreement and its impact on the industry, see the official news release from the Semiconductor Industry Association of America.

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