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China Launches Probe into U.S. Chip Subsidies Over Impact on Domestic Industry

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China’s commerce ministry announced an investigation into U.S. government subsidies to the semiconductor sector, claiming these subsidies have harmed Chinese manufacturers of mature node chips. Unlike advanced chips used in AI, mature node chips are simpler and cheaper to produce, often utilized in household appliances and communication devices. Beijing asserts that U.S. subsidies, particularly under the CHIPS and Science Act, have given U.S. companies an unfair advantage, allowing them to export mature node chips to China at low prices and undermining China’s domestic chip industry.

The probe is part of China’s broader strategy of responding to Washington’s increasingly stringent restrictions on Chinese semiconductor firms, which the Biden administration has accused of potentially strengthening China’s technological capabilities, including its military. The investigation is expected to target U.S. companies, including Intel, which sell mature node chips to China.

This move follows a similar complaint from the U.S. about China’s practices in the chip industry, such as alleged state-backed artificial price suppression and overcapacity. The outcome of the probe could lead to retaliatory actions affecting U.S. chipmakers in the Chinese market. It remains to be seen what specific measures Beijing will take.

 

U.S. Finalizes Up to $6.75 Billion in Semiconductor Awards for Samsung, Texas Instruments, and Amkor

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The U.S. Commerce Department announced finalized awards totaling up to $6.75 billion to Samsung Electronics, Texas Instruments, and Amkor Technology, supporting efforts to boost domestic semiconductor production and packaging capabilities. These awards are part of a broader $39 billion subsidy program aimed at strengthening U.S. semiconductor manufacturing.

Samsung Electronics will receive up to $4.745 billion—$1.7 billion less than the initial April estimate of $6.4 billion—reflecting adjusted investment plans. Samsung now plans to invest $37 billion, down from the originally stated $45 billion, in building two chip production facilities, a research center, and a packaging facility by 2030. The Commerce Department stated that the changes were made to align the award with revised market conditions and the company’s updated investment scope.

A Samsung spokesperson noted that the company’s “mid-to-long-term investment plan has been partially revised to optimize overall investment efficiency” without disclosing further details.

Texas Instruments is set to receive up to $1.61 billion, with $900 million allocated to its Texas facilities and $700 million for its operations in Utah. The company has committed over $18 billion through 2029 to construct two factories in Texas and one in Utah, collectively expected to create 2,000 manufacturing jobs.

Amkor Technology will receive up to $407 million to support its $2 billion advanced semiconductor packaging facility in Arizona, which will be the largest of its kind in the United States. The facility will focus on packaging and testing chips for applications such as autonomous vehicles, 5G/6G, and data centers. Apple has been named its first and largest customer, with chips sourced from a nearby Taiwanese Semiconductor Manufacturing Company (TSMC) plant.

Amkor CEO Giel Rutten highlighted the strategic importance of the Arizona plant, calling it a “critical cornerstone” in establishing a robust U.S. semiconductor supply chain.

This announcement follows Congress’s approval in August 2022 of a $39 billion subsidy program, alongside $75 billion in government lending authority, to bolster the semiconductor industry. The Commerce Department has now finalized over $33 billion of the $36 billion in proposed incentive funding.

Earlier this week, the Commerce Department also finalized $458 million for SK Hynix’s Indiana facility and previously confirmed up to $7.86 billion for Intel, down slightly from an initial $8.5 billion estimate due to separate Pentagon funding for Intel projects.

Commerce Secretary Gina Raimondo underscored the significance of these investments, noting that “the U.S. is now officially the only country on the planet that is home to all five leading-edge semiconductor manufacturers.”