The Biden administration has launched a trade investigation into China’s production of legacy semiconductors, essential components for industries like automotive, telecommunications, and defense. The inquiry carried out under Section 301 of the Trade Act, aims to assess whether China’s subsidies and aggressive production expansion unfairly harm global competition and U.S. investments supported by the CHIPS Act. Trade investigations under the Trade Act typically take six months to a year to complete. With China potentially dominating over 40% of global legacy chip capacity by 2032, the U.S. government warns of national security risks, including supply chain vulnerabilities and reduced viability of American chip plants.
My Take
China’s legacy chip strategy highlights a broader trend in which state-supported industrial policies can disrupt global markets. The U.S. must accelerate collaboration with allies to establish resilient supply chains and incentivize domestic production of legacy chips. Failing to act swiftly risks deepening the U.S. dependence on foreign-made chips, undermining economic stability and national security.
#Semiconductors #CHIPSAct #USChinaRelations #LegacyChips #TechPolicy #Innovation #GlobalSupplyChain #Geopolitics #AI
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Credit: NYT
This post was enhanced with AI assistance, thoroughly reviewed, edited, and reflects my own thoughts.