Commerce Secretary Raimondo stated that approximately 60 percent of all new legacy chips entering the market in the next few years will be manufactured by China.
The United States and the European Union are collaborating to address national security concerns related to China’s attempts to dominate the global market for legacy semiconductors through “non-market” policies and practices.
“Based on China’s own data, we know that around 60 percent of upcoming ‘legacy’ chips will be produced by China in the coming years,” Commerce Secretary Gina Raimondo disclosed during a
press conference in Leuven, Belgium, on April 5.
She added, “We are aware of significant government subsidization of the industry by the Chinese government, leading to potential market distortions, which is why we are closely monitoring the situation.”
Legacy semiconductors are chips that are
28 nanometers (nm) or larger and are made using mature technologies that have been in use for 10 to 20 years. These chips are still widely used in various industries like automotive, electronics, appliances, and medical devices.
“China has a keen focus on these older chips,” noted Raimondo, emphasizing that legacy semiconductors serve as the foundation of semiconductor chips.
Supply Chain Survey
In December, the Commerce Department initiated a semiconductor supply chain survey under the Defense Production Act to evaluate how U.S. companies in critical industries procure legacy chips in an effort to address national security risks posed by China.
The Commerce Department highlighted that China has provided substantial subsidies amounting to $150 billion over the past decade to boost its domestic semiconductor industry. This has led to potential below-market pricing and an uneven global playing field for U.S. and other foreign competitors.
Raimondo mentioned that the survey is mandatory to gather market data for evidence of market distortion, with plans to share this data with the Europeans who have also conducted a similar survey.
The joint EU-U.S. statement released on April 5 acknowledges shared concerns about non-market economic policies affecting legacy semiconductors.
Addressing the complexities of imposing tariffs on imports with Chinese legacy chips, an
analysis by the Center for Strategic and International Studies highlighted potential challenges that could arise from such actions.
In January, Rep. Mike Gallagher and Rep. Raja Krishnamoorthi raised concerns about Chinese legacy semiconductors in a
letter to Ms. Raimondo.
One of the inquiries they made was about the authority of the United States to impose tariffs specifically on Chinese legacy chips rather than finished products.
