The U.S. Department of Commerce will review whether the use of legacy chips by U.S. companies are part of China’s dominant standing in the semiconductor industry. The move, first reported by Reuters, will initiate a supply chain review that will start next year. It comes less than a week after the Commerce Department released a detailed report on the state of the U.S. semiconductor industry. While the U.S. makes up roughly half of the entire global chipmaking industry, it faces a few threats, according to the report. Principal among them are subsidies offered to companies who choose to manufacture in other countries.
The U.S. has already cracked down on advanced chips in China, barring U.S. companies from importing and exporting some types of processors. Though China has made some surprising breakthroughs despite the U.S. sanctions, the country still lags behind the Taiwan-based TSMC and the South Korean giant Samsung. However, this U.S. inquiry isn’t looking into China’s advanced silicon. Instead, it concerns legacy processors.
Legacy processors are those that are less advanced, but are commonly used in essential products. These could include anything from cars to appliances. According to the Department of Commerce, legacy chips are made using the 28nm process, or greater nodes.
“Over the last few years, we’ve seen potential signs of concerning practices from the PRC to expand their firms’ legacy chip production and make it harder for U.S. companies to compete,” Gina Raimondo, the secretary of commerce, told the Washington Examiner in a statement. “To get ahead of these concerns, the Department of Commerce is taking proactive measures to assess the U.S. semiconductor supply chain by collecting data from U.S. companies on the sourcing of their legacy chips.”
Are legacy chips from China a threat to the US?
As tensions with China come to a head, the U.S. wants to make sure that it has independence in the semiconductor industry. This is especially true in the years following the COVID-19 pandemic, when chip shortages exposed just how much the U.S. relied on China. If given a choice, the U.S. would undoubtedly choose to focus on advanced chip manufacturing. However, it also makes sense why it would look into legacy chips as well.
Many types of devices now use semiconductors, and the list far exceeds just phones and computers now. Products like cars, fridges, or air conditioning units now employ legacy chips to function. Without them, the U.S. could be in some trouble, as it learned during the pandemic. For now, the Commerce Department is just initiating a review, so we’ll have to see where this goes.
2023-12-22 15:06:45