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