Specialty Network SLLC – China has announced an investigation into U.S. government subsidies for its semiconductor sector, claiming these policies harm Chinese mature node chipmakers. This development, revealed by China’s commerce ministry, marks yet another chapter in the escalating technological rivalry between the world’s two largest economies.
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The investigation focuses on subsidies granted under the CHIPS and Science Act of 2022, which provided $52.7 billion for U.S. semiconductor production, research, and workforce development. According to China’s commerce ministry, these subsidies give American companies an unfair advantage, allowing them to export mature node chip products to China at artificially low prices. As a result, Chinese manufacturers claim their rights and competitiveness have been undermined.
Unlike cutting-edge chips used in artificial intelligence and advanced computing, mature node chips are less complex, more affordable, and easier to manufacture.
While these chips are not as advanced as AI-focused semiconductors, they play a crucial role in global supply chains, powering everyday technologies. Consequently, their affordability and availability are vital for numerous industries.
China’s investigation is widely seen as a response to Washington’s tightening restrictions on semiconductor technology exports to China. Over the past three years, the U.S. has imposed significant controls aimed at curbing China’s access to cutting-edge chips, citing concerns about national security and technological dominance.
In retaliation, China’s investigation mirrors these allegations, accusing U.S. subsidies of violating fair market principles.
Following the commerce ministry’s announcement, the China Semiconductor Industry Association issued a statement endorsing the investigation. Comprised of executives from the nation’s largest chipmakers, the association criticized the CHIPS Act, claiming it distorts market dynamics and undermines China’s domestic semiconductor development.
Moreover, the association emphasized that U.S. subsidies contradict the basic laws of the market economy, escalating geopolitical tensions in the global semiconductor sector.
Although it remains unclear what specific measures China might take following the investigation, its past actions provide some clues.
These moves suggest that China is prepared to leverage its strategic resources to counter U.S. policies.
For American firms, particularly those exporting mature node chips to China, the investigation could have serious repercussions. Companies like Intel, which rely heavily on the Chinese market, may face increased scrutiny, reduced access, or even retaliatory tariffs.
China’s semiconductor industry has long trailed behind the U.S. in advanced chip technologies. However, mature node chips remain a critical segment where Chinese manufacturers hold significant market share.
China’s investigation into U.S. chip subsidies is more than just a trade dispute. It represents a significant moment in the ongoing battle for economic and technological dominance. As both countries implement aggressive strategies to secure their positions, the global semiconductor industry faces increasing uncertainty.
For companies operating in this sector, navigating these challenges will require adaptability, innovation, and careful strategic planning. Ultimately, the outcomes of this probe could reshape the future of semiconductor production and redefine global competition in the tech industry.