China wants to challenge the US in artificial intelligence. Chinese tech giants have launched their own AI models.
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The Biden administration said Monday it had launched a new investigation into legacy Chinese semiconductors that could cover everything from cars to household goods and defense systems.
China “routinely engages in non-market policies and practices, as well as industrial targeting” of the chip industry, which allows Chinese companies “to significantly harm competition and create dangerous supply chain dependencies in core semiconductors,” the White House said in a statement. .
The so-called Section 301 investigation will examine China’s “acts, policies and practices in the production of silicon carbide substrates or other wafers used as inputs in semiconductor manufacturing,” the White House added.
More broadly, Washington’s investigation seeks to assess the U.S.’s reliance on legacy Chinese chips in areas ranging from telecommunications to the power grid.
The new investigation marks an escalation of US pressure on China’s semiconductor industry. To date, many of the actions taken by Washington have focused on cutting-edge chips, particularly those used in the growing artificial intelligence sector.
So-called legacy chips are produced using a less advanced manufacturing technique. Chinese chipmakers are still generations behind industry leaders like TSMC, but they are able to produce legacy chips at scale.
The latest investigation into China’s legacy chips is being conducted under the Trade Act of 1974. One potential remedy that could be imposed under this law is the imposition of tariffs on the products in question.
The Biden administration has continued to target China’s technology sector this year by raising import tariffs on products from electric vehicles to semiconductors. The latest action comes just weeks before the current US president hands over the reins to Donald Trump.
Reuters, citing Biden administration officials, reported on Monday that the legacy chip investigation would be handed over to the Trump administration for completion.
