The US will investigate its semiconductor supply chain. Credit: Getty Images/William_Potter.

The US will launch a survey of its semiconductor supply chain and national defence industrial base to address national security concerns around artificial intelligence (AI) chips sourced from China. 

The survey will look into how US companies are sourcing the chips as it moves towards dishing out around $40bn in subsidies for domestic chip manufacturing. 

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The US Department of Commerce said the survey, which is due to begin in January, aims to “reduce national security risks posed by” China.

Gina Raimondo, Commerce Secretary, said the US has seen “potential signs of concerning practices” from China “to expand their firms’ legacy chip production and make it harder for US companies to compete”.

According to research company GlobalData, the ongoing trade dispute between the US and China is “increasingly disrupting the landscape”.

Although China is beginning to make progress on domestic chip making, companies like Alibaba, Huawei and Baidu still have limited access to advanced manufacturing technologies, according to GlobalData’s Thematic Intelligence: Semiconductors Q3 2023 report.

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The semiconductor industry, which experienced a slowdown throughout 2022 and 2023, will return to growth in 2024, according to GlobalData. 

Revenue within the semiconductor sector experienced a slowdown of 9.4% from 2022 to 2023, according to World Semiconductor Trade Statistics. 

The slowdown was due to the cyclical nature of the industry, combined with supply chain disruptions, component shortages, the global economic downturn and geopolitical turmoil, according to GlobalData’s Tech, Media, & Telecom Predictions 2024 report.