China will initiate an investigation into the US government’s subsidies for its semiconductor sector, alleging harm to Chinese mature node chipmakers, reported Reuters.
Unlike advanced chips which are used in artificial intelligence (AI), mature node chips are more affordable and simpler to produce, serving in home appliances and communication systems.
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The probe reflects Beijing’s response to continued US restrictions on China’s semiconductor industry.
In a statement, China’s commerce ministry said: “The Biden administration has given a large amount of subsidies to the chip industry, and US enterprises have thus gained an unfair competitive advantage and exported relevant mature node chip products to China at low prices, which has undermined the legitimate rights and interests of China’s domestic industry.”
The investigation was supported by the China Semiconductor Industry Association (CSIA), which comprises executives from major Chinese chip companies.
China’s commerce ministry has also criticised the Biden administration’s CHIPS and Science Act.
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By GlobalDataThis act, which was announced in 2022, pledged $52.7bn in subsidies for US semiconductor production, research, and workforce development, which the CSIA claims violate market economy principles.
Recently, the US Department of Commerce announced support of $1.4bn in awards for advancing semiconductor packaging.
Beijing’s accusations mirror the US rationale for raising tariffs on Chinese chip imports in September and investigating China’s mature chip node industry.
US Trade Representative Katherine Tai stated that China’s expanded capacity and lowered prices harm competition.
Over the past three years, Washington has tightened export controls on advanced US-made AI chips to China.
The outcome of China’s probe is uncertain, but US companies such as Intel, selling mature node chips in China, may be impacted.
While China’s semiconductor industry lags behind the US, Beijing has responded to US chip curbs by limiting rare earth metal exports and investigating US AI chipmaker NVIDIA for anti-monopoly law violations.
