Daily Management Review

China Import Worries Prompt The US To Start Reviewing Its Semiconductor Supply Chain


China Import Worries Prompt The US To Start Reviewing Its Semiconductor Supply Chain
In order to address national security concerns over chips sourced from China, the U.S. Department of Commerce said that it will begin an investigation into the country's defence industrial base and semiconductor supply chain.
The purpose of the poll is to determine how American businesses are obtaining so-called legacy chips, or current-generation and mature-node semiconductors, as the government prepares to grant manufacturing subsidies totaling about $40 billion.
According to the department, the survey will start in January and will concentrate on the sourcing and usage of Chinese-manufactured legacy chips in the supply chains of vital U.S. sectors. Its goal is to "reduce national security risks posed by" China.
China has reportedly given the Chinese semiconductor industry $150 billion in subsidies over the past ten years, according to a report released by the department on Thursday. This has resulted in "an unlevel global playing field for US and other foreign competitors."
Gina Raimondo, the secretary of commerce, stated that "over the last few years, we've seen potential signs of concerning practices from (China) to expand their firms' legacy chip production and make it harder for U.S. companies to compete."
As stated on Thursday by its embassy in Washington, the US "has been stretching the concept of national security, abusing export control measures, engaging in discriminatory and unfair treatment against enterprises of other countries, and politicising and weaponizing economic and sci-tech issues."
Raimondo stated last week that her agency anticipates awarding about a dozen grants for semiconductor chips over the course of the next year, including multibillion dollar announcements that have the potential to fundamentally alter the direction of U.S. chip production. On December 11, her department presented the program's inaugural award.
According to the Commerce Department, the poll will also support the creation of fair competition for the manufacturing of legacy chips. "Addressing non-market actions by foreign governments that threaten the U.S. legacy chip supply chain is a matter of national security," said Raimondo.
According to the government, U.S.-based companies generate roughly half of the world's semiconductor revenue, but they also face fierce competition from foreign subsidies.
The research suggested that the cost of producing semiconductors in the US might be "30-45% higher than the rest of the world" and advocated for sustained funding for the development of domestic fabrication facilities.
It stated that the United States ought to implement "permanent provisions that incentivize steady construction and modernization of semiconductor fabrication facilities, such as the investment tax credit scheduled to end in 2027."