The Biden administration has launched a sweeping investigation into China’s dominance in legacy semiconductor manufacturing, accusing Beijing of using unfair practices to undercut competitors. According to CIO, the probe is led by the US Trade Representative (USTR), highlighting growing concerns about the impact of China’s policies on American industries and national security.
Legacy chips, vital for industries ranging from automotive and defense to medical devices, are at the center of this escalating US-China tech conflict. China, backed by billions in subsidies and state-driven initiatives like the “Made in China 2025” strategy, is projected to control over 60% of global legacy chip capacity by 2029.
“China’s anti-competitive actions, including cyber intrusions, forced technology transfers, and underpricing chips, have severely undermined the competitiveness of American industries,” said Katherine Tai, the US Trade Representative. She emphasized that these practices threaten not only economic security but also critical supply chains.
Industry leaders like John Neuffer, CEO of the Semiconductor Industry Association, support the USTR’s actions, urging Washington to bolster domestic chip production and research ecosystems. “Building US capacity and driving demand for Made-in-America chips is crucial for long-term resilience,” Neuffer stated.
However, addressing China’s dominance won’t be easy. Analysts warn that additional sanctions targeting mature-node technologies—such as microcontrollers and connectivity components,could disrupt China’s self-sufficiency while creating ripple effects across global supply chains.
“Finding alternatives to Chinese components at similar costs and scales will be a significant challenge,” said Neil Shah, VP at Counterpoint Research. He added that restrictions could reshape the competitive landscape, raising prices for US-made products and forcing supply chain restructuring.
The probe follows broader efforts, including the $52 billion CHIPS and Science Act, to strengthen the US semiconductor industry. A public hearing is set for March 2025, with the USTR seeking input to guide its strategies.
This investigation underscores the high stakes in the US-China tech rivalry, which extends beyond semiconductors to AI and quantum computing. As Washington doubles down on countering Beijing’s ambitions, the outcome of this probe could redefine the semiconductor market and the balance of global technological power.
Photo: Pressmaster
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Who’s winning? Looks like the winner is Southeast Asia—for now.