Low-end legacy chips not subject to restrictions but vital to industry have given strength to Chinese manufacturers
China is gaining ground in the chip war by expanding its production of legacy semiconductors, which are critical for industries like automotive and appliances but are not subject to stringent U.S. export restrictions. Despite the U.S. retaining dominance in cutting-edge chips, China’s aggressive state-backed investment, rising domestic demand, and growing global market share in mature nodes signal a strategic push reminiscent of its dominance in solar panels. Chinese foundries now supply 53% of mature chips consumed domestically, up from 48% in 2017, posing challenges for U.S. firms like Texas Instruments and GlobalFoundries. As China leverages long-term state support and stockpiles tools, its progress underscores a potential gap in Washington’s “small yard, high fence” tech control strategy.
My Take
Legacy chips are essential for powering everyday technologies like automobiles, household appliances, and industrial equipment, making them critical to economic stability. The U.S. must reassess its semiconductor strategy, recognizing that dominance in advanced chips alone will not suffice. Subsidizing or partnering with domestic legacy chip producers will be critical to countering China’s growing influence and ensuring a balanced, secure supply chain.
#ChipWar #Semiconductors #China #LegacyChips #TechStrategy #Geopolitics #SupplyChainResilience
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Credit: WSJ
This post was enhanced with AI assistance, thoroughly reviewed, edited, and reflects my own thoughts.