[News] Biden Reportedly Plans Investigation Into Chinese Legacy Chips, Set to Begin as Early as Next Week

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According to UDN News, citing The New York Times, sources suggest that the Biden administration may initiate a trade investigation targeting China’s legacy chip production in the coming weeks.

The New York Times report indicates that a Washington-based trade association recently sent out member letters disclosing that the Biden administration had decided to launch an investigation into Chinese legacy chip production under Section 301 of the 1974 Trade Act, and the U.S. Trade Representative’s Office is expected to begin its preparations for initiating the investigation as soon as next week.

The investigation could potentially result in tariffs, import bans, or other actions on certain Chinese legacy chips and the products that contain them, as the New York Times report notes. However, since the investigation would take approximately six months, the final course of action would ultimately depend on President-elect Trump.

The New York Times highlights that while the Biden administration has already restricted China’s access to advanced semiconductor technology due to national security concerns, production of legacy chips in China remains unaffected. These chips are crucial components for manufacturing smartphones, automobiles, dishwashers, refrigerators, and network communication devices.

The report underscores the Biden administration’s concerns that China’s large-scale production of legacy chips could undermine the competitiveness of chip manufacturers in the U.S. and allied countries.

The New York Times cites U.S. Commerce Secretary Gina Raimondo, who stated at the Reagan National Defense Forum on December 7 that China is subsidizing these chips and dumping them into the global market, suggesting that tariffs on these chips should be increased.

Notably, according to a report from Fortune, the Biden administration announced in May that it would increase tariffs on legacy chips from China, starting next year. However, the New York Times report notes that the impact of this measure is limited, as the majority of Chinese-made chips enter the U.S. embedded within finished products.

According to The New York Times, federal government documents dated November 21 reveal that the Department of Commerce had already been collecting information on China’s legacy chip production.

According to TrendForce’s press release and report, due to China’s domestic IC substitution policy, the increase in mature process capacity is expected to be primarily driven by Chinese foundries by 2025. With the expansion of new production capacity in China, it is estimated that by the end of 2025, the share of mature process capacity held by Chinese foundries among the top ten global foundries will exceed 25%, with the largest capacity increase in 28/22nm nodes.

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