This week, the administration of the President of the United States Joe Biden launched a new probe regarding legacy Chinese semiconductors, which can be used in a large number of product categories, including the automotive industry, the defense systems sector, and the household goods section.
In a statement released by the White House, it was noted that the mentioned Asian country regularly pursues non-market policies and practices, and in this context has targeted industrial activity. It was also highlighted that China’s corresponding actions allow local companies to significantly harm competition and form dangerous dependencies in the supply chains of foundational semiconductors.
The so-called Section 301 investigation will address the acts, policies, and practices of an Asian country in the area of silicon carbide substrates or other wafers used as inputs into semiconductor fabrication. This was announced by the White House.
The probe launched by Washington is focused on determining the degree of dependence of the United States on legacy Chinese chips in many areas, including telecommunications and the electrical grid.
The new investigation indicates another phase of increased pressure from the US on the semiconductor industry in the Asian country. It is worth noting that the mentioned industry has already become a kind of space of rivalry between Washington and Beijing as part of the current gradually growing escalation of geopolitical tensions between these two capitals. The United States has already restricted the export of advanced chips and equipment to manufacturing such microcircuits to China. As part of the retaliatory measures, the Asian country has banned shipments of several minerals to the US.
It is worth noting separately that the semiconductor industry is of critical importance for the development of the area of artificial intelligence. Chips are necessary for training and ensuring the process of subsequent functioning of AI systems. In the context of this technological circumstance, it is appropriate to note that access to microcircuits and the ability to independently produce relevant products will very soon largely determine the economic potential of countries and their positions in the international arena. From the point of view of the mentioned thought the current tightening of relations between Beijing and Washington is, in a sense, a logical manifestation of global competition in the context of the new reality of the material and digital evolution of the world as a space for the existence of human civilization.
Legacy chips are manufactured using less advanced techniques. Chinese makers of microcircuits are still lagging behind industry leaders such as Taiwan Semiconductor Manufacturing Company (TSMC) to a certain extent. At the same time, the mentioned makers can produce legacy chips on a large scale, which is a positive factor from the point of view of the financial aspect of the activity.
A new investigation into the specified Chinese microcircuits is being conducted under the Trade Act of 1974. One of their potential remedies under the mentioned law is the imposition of tariffs on products.
It is worth noting that this year the Joe Biden administration increased tariffs on goods imported from China, including, among others, electric vehicles and semiconductors.
The media, citing insiders, reported that the investigation launched this week will be handed over to the administration of Donald Trump, who won the United States presidential election last month and will return to the White House in January. It is also worth noting that Mr. Trump has repeatedly stated his intention to raise tariffs on imported goods, including products shipped from China.
