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The United States has initiated an investigation into alleged anti-competitive practices by China to bolster its semiconductor industry, just weeks before President-elect Donald Trump takes office.
The US Trade Representative’s office has announced a probe into “China’s acts, policies and practices related to targeting of the semiconductor industry for dominance.”
This investigation, conducted under Section 301 of the US Trade Act, will initially focus on “foundational” semiconductors used in various industries such as automotive, healthcare, infrastructure, aerospace, and defense.
The escalating trade war over semiconductors has raised concerns about potential disruptions to global supply chains.
Possible outcomes of the Section 301 investigation include import restrictions or new tariffs on semiconductor shipments from China, particularly those used in cars, household appliances, and consumer devices. The final decision would rest with the incoming Trump administration.
Washington has accused China of employing “extensive anti-competitive and non-market means” to achieve dominance in the semiconductor industry both domestically and globally.
While Chinese chipmakers have made significant investments to expand production capacity, restrictions on advanced chip manufacturing equipment sales have hindered their progress in certain areas.
The US and European semiconductor industries have raised concerns about overreliance on Chinese suppliers, citing potential national security risks.
Amidst the AI hype, the importance of legacy semiconductors was highlighted during the Covid-19 pandemic, which led to shortages of electronic goods due to factory shutdowns.
A recent report by the US Department of Commerce noted that China’s increased production of mature-node semiconductors has started impacting US chip suppliers’ competitiveness.
China’s efforts to reduce its dependence on foreign chip technologies have been met with export controls from the US and retaliatory measures from Beijing.
These developments underscore the ongoing tensions between the US and China in the semiconductor industry, with implications for global trade and technology competitiveness.