On Monday, the White House launched a new investigation into Chinese semiconductors made using older processes that are widely used in everything from cars and smart homes to defense systems. According to the US administration, China “regularly engages in non-market policies and practices” that allow Chinese companies to “substantially harm competition and create dangerous supply chain dependencies in essential semiconductors.”
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The new investigation will assess US dependence on mature Chinese chips in a wide range of technology areas, from telecommunications to power grids. The so-called Section 301 investigation will also examine, according to a US administration official, “China’s actions, policies and practices in the production of silicon carbide wafers or other wafers used as feedstocks for semiconductor manufacturing.”
So-called legacy chips are produced using less advanced manufacturing technologies. Chinese chipmakers are still several generations behind industry leaders such as TSMC, but they are capable of producing legacy chips in large quantities.
The investigation is being carried out under the Trade Act 1974. One potential remedy under this law is the imposition of tariffs on the products in question.
The US administration is consistently putting sanctions pressure on China’s technology sector. The new investigation marks an escalation of pressure on China’s semiconductor industry. Until now, most of the actions taken by the US have been related to advanced chips, particularly those used in the booming artificial intelligence sector.