Concerns about Chinese imports prompt US to conduct an assessment of semiconductor supply chain

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Concerns about Chinese imports prompt US to conduct an assessment of semiconductor supply chain
Concerns about Chinese imports prompt US to conduct an assessment of semiconductor supply chain

The US Department of Commerce stated that it will conduct an assessment of the US semiconductor supply chain to address national security concerns posed by Chinese-sourced chips.

The US Department of Commerce announced Thursday that it will conduct a survey of the US semiconductor supply chain and national defense industrial base to address national security concerns raised by Chinese-sourced chips.

The study attempts to determine how American corporations source so-called legacy chips—current-generation and mature-node semiconductors—as the government prepares to grant almost $40 billion in subsidies for semiconductor chip manufacturing.

The survey, which will begin in January, intends to “reduce the national security risks posed by” China and will focus on the use and sourcing of Chinese-manufactured legacy chips in important U.S. businesses’ supply chains.

China has contributed an estimated $150 billion in subsidies to the Chinese semiconductor industry over the last decade, creating “an unlevel global playing field for US and other foreign firms,” according to a report released by the department on Thursday.

Secretary of Commerce Gina Raimondo stated that “over the last few years, we’ve seen potential signs of concerning practices from China to expand their firms’ legacy chip production and make it harder for U.S. companies to compete.”

According to China’s embassy in Washington, the US “has been stretching the concept of national security, abusing export control measures, engaging in discriminatory and unfair treatment of other countries’ enterprises, and politicizing and weaponizing economic and scientific issues.”

Raimondo stated last week that her agency expected to issue a dozen semiconductor chip financing grants within the next year, including multi-billion dollar announcements that could radically alter US chip output. On December 11, her department presented the program’s inaugural award.

According to the Commerce Department, the survey will also contribute to the promotion of a level playing field for legacy chip manufacturing. “Addressing non-market actions by foreign governments that threaten the U.S. legacy chip supply chain is a matter of national security,” Raimondo said.

According to the government, US-based companies account for around half of worldwide semiconductor revenue but face severe competition aided by foreign subsidies.

According to its assessment, the cost of producing semiconductors in the United States might be “30–45% higher than the rest of the world,” and it has advocated for long-term support for domestic fabrication.

It stated that the U.S. ought to implement “permanent provisions that incentivize steady construction and modernization of semiconductor fabrication facilities, such as the investment tax credit scheduled to end in 2027.”

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