The US has launched a probe into alleged anti-competitive and non-market measures used by China to support its semiconductor industry, just weeks before the Biden administration hands over to president-elect Donald Trump. The US Trade Representative’s office said it was investigating “China’s acts, policies and practices related to targeting of the semiconductor industry for dominance”.
The probe will be conducted under Section 301 of the US Trade Act and initially target what the USTR called “foundational” semiconductors, including those used by the automotive, healthcare, infrastructure, aerospace and defence industries. Potential outcomes of a Section 301 investigation include import restrictions or new tariffs on shipments from China of the kinds of chips used in cars, household appliances and consumer devices — a decision that would fall to the Trump administration. Washington accused China of using “extensive anti-competitive and non-market means, including setting and pursuing market share targets, to achieve indigenisation and self-sufficiency”. China’s alleged tactics were designed to achieve dominance of the semiconductor industry in China and on global markets, the USTR said. After several years of focusing its semiconductor policies on the most cutting-edge processors necessary for creating advanced artificial intelligence, Washington is turning its attention to more the mature end of the market, with chips manufactured using what the industry calls “legacy” production systems. Makers of advanced chip manufacturing equipment, such as ASML, are already restricted from selling their most sophisticated tools to Chinese chipmakers, holding back China’s advances in AI and curtailing its efforts to build a rival to Silicon Valley-based Nvidia. However, that has not prevented Chinese chipmakers from making huge investments to scale up production of legacy semiconductor