According to a statement from the White House, China frequently employs non-market strategies and industrial targeting within the chip sector, enabling its companies to significantly undermine competition and create precarious dependencies in essential semiconductor supply chains.
This investigation, referred to as a Section 301 inquiry, will examine China's actions, policies, and practices related to the production of silicon carbide substrates and other wafers that serve as inputs for semiconductor manufacturing.
The overarching goal of this investigation is to evaluate the United States' reliance on legacy Chinese chips across various sectors, including telecommunications and the electrical grid.
This new inquiry represents a heightened level of U.S. scrutiny on China's semiconductor industry. Previously, Washington's efforts have primarily focused on advanced chips, particularly those integral to the rapidly growing artificial intelligence market.
Legacy chips are manufactured using less sophisticated techniques. While Chinese chip producers lag behind industry leaders like TSMC by several generations, they have the capacity to produce legacy chips in large quantities.
The current investigation into Chinese legacy chips is being carried out under the Trade Act of 1974, which allows for potential remedies such as imposing tariffs on the relevant products.
Throughout this year, the Biden administration has intensified its focus on China's technology sector, implementing increased import tariffs on a variety of goods, including electric vehicles and semiconductors. This latest action occurs just weeks before the current U.S. president is set to transfer power to Donald Trump.
According to Reuters, citing officials from the Biden administration, the investigation into legacy chips will be passed on to Trump's administration for completion.