On January 16, China announced an investigation into U.S. government subsidies to its semiconductor sector upon request of China's mature node chip industry, as reported by the commerce ministry. These mature node chips, unlike cutting-edge ones for AI, are larger and used in simpler tasks like home appliances and communications.
According to China's commerce ministry, the Biden administration's subsidies have created unfair competition for U.S. businesses, leading to low-priced mature node chip exports to China, damaging the local industry’s rights. The U.S. Commerce Department did not comment on the Chinese probe.
The dispute mirrors the U.S. tariff hike on Chinese chip imports and a recent probe into China's mature chip node industry, which aimed to address capacity expansion, price manipulation, and unfair competition fueled by Chinese state support, according to U.S. Trade Representative Katherine Tai.
The outcomes of China's investigation remain uncertain, but U.S. companies like Intel, heavily reliant on selling mature node chips in China, may face implications. In a separate move, Washington has tightened export controls in the past three years, particularly targeting advanced U.S.-made AI chip sales to China.