Biden fires grand finale chip war salvo at China – Asia Times
The Biden administration announced a deal exploration into Chinese tradition semiconductors, which generally refer to 28 millimeter or higher chips, to defend America’s chip-making business.  ,
According to a fact sheet released by the White House on Monday ( December 23 ), the Office of the US Trade Representative will launch a Section 301 investigation to examine the People’s Republic of China ( PRC )’s ( PRC ) plan to target foundational semiconductors or mature node chips for dominance and the impact on the US economy.  ,
The USTR probe will protect Chinese semiconductors integrated as components into upstream products for vital industries like defense, mechanical, medical devices, aerospace, telecommunications, and power generation and the electric grid.  ,
It will also examine whether the impact of China’s actions, policies, and methods on the production of silicone carbide materials ( or other chips used as inputs to semiconductor fabrication ) contributes to any unjustifiableness, discrimination, or burden or restraint on US commerce.
US Trade Representative Katherine Tai, the Biden-Harris Administration’s official, praised the investigation as” a powerful tool for standing up for American workers and firms, strengthening the resilience of important supply stores, and supporting unmatched investment in this sector.”
The Biden presidency was reportedly preparing to investigate China’s identity cards, according to a December 16 article in The New York Times. According to the report, the investigation does take at least six months to complete, so the incoming Trump leadership will be in charge of making that decision.
The USTR’s upcoming tradition chip sensor was criticized by the Chinese Ministry of Commerce (MC) on Monday.
Through the Device and Science Act, a MoC director claimed that the US part has given its chip business “heavy incentives.” The US accuses China of having so-called non-market techniques and exaggerates the risk of the Chinese chip industry, noting that its businesses account for nearly half of the global chip industry.
Washington should take into account the fact that American chips are imported from China much more than American chips are.
” The Biden administration wants to create a fine net to contain China’s chip sector”, Lai Jiaqi, a columnist at Guancha.cn, said in a recent article.  ,
” In the past, the US government’s curbs against China’s chip industry were focusing on the ban of the shipment of advanced US chips”, Lai said. China is gradually increasing its investments in the production of its own mature chips as the US tightens its regulations.
According to the author, it’s unlikely that there will be an oversupply of Chinese mature chips in the next two to three years, according to a report from the Center for Strategic and International Studies ( CSIS), a think tank based in Washington.
Overcapacity concerns
The three reasons why overcapacity concerns are either exaggerated or misunderstood as coming from China are described in the CSIS report:
- The purpose of Chinese companies expanding their capacity is to primarily supply domestic demand. China still imports the majority of its domestic semiconductor consumption requirements.
- Domestic demand in China is still high and will increase significantly through 2030. Domestic chip capacity will be able to meet about 90 % of domestic demand by 2030, compared to 37 % in 2020, assuming all of the previously announced factories in China are finished and operational by 2030.
- For some consumer electronics applications, Chinese foundries ‘ products are becoming more expensive, but they are still far less reliable for end-use applications like cars. Foreign companies will continue to dominate the Chinese market.
The White House announced on Monday that it would strengthen federal supply chain security in addition to looking into Chinese legacy chips by forbidding executive federal agencies from purchasing or obtaining products or services that include chips from specific Chinese factories and other relevant entities.  ,
Additionally, it added that it will work with its international partners to improve cooperation in semiconductor supply chains and address shared concerns about China’s alleged unfair practices.
CHIPS for America
The Biden administration has introduced a number of new measures to combat China’s chip sector ahead of Republican President-elect Donald Trump’s inauguration on January 20.
Following two previous rounds in October 2021 and 2022, the Commerce Department’s Bureau of Industry and Security ( BIS ) released a third package of chip export regulations against China on December 2.  ,
Additionally, the BIS added 140 Chinese chip manufacturers and suppliers to its” Entity List,” as well as new export controls for 24 different types of semiconductor manufacturing equipment, three different software tools for creating or producing semiconductors, and high-bandwidth memory ( HBM ) chips.  ,
To determine the best ways to encourage government contractors, especially those with commercial IT products and services, to increase their use of domestically produced chips, the US Office of Management and Budget ( OMB) released a Request for Information ( RFI ) on December 10.
The White House released its first-ever Quadrennial Supply Chain Review on December 19 to provide an in-depth analysis of the nation’s crucial supply chains, recommendations for improvement over the past four years, and recommendations for further improvements to US resilience in the future.  ,
Additionally, US President Biden has accelerated the pace of funding qualified chipmakers for the construction of foundries.  ,
According to the government, the CHIPS for America initiative has so far provided over US$ 26 billion in incentives to boost domestic production of semiconductors and their supply chains. It said this made America home to all five of the world’s leading-edge logic and memory providers, while no other economy has more than two.  ,
‘ A fool’s errand’
Four Chinese industry organizations demanded their members not to purchase American legacy semiconductors due to” safety” concerns after the US announced new export controls to prohibit the shipping of high-end US chips to China on December 2.  ,
The Internet Society of China, the China Association of Automobile Manufacturers, the China Association of Communications Enterprises, and the China Association of Semiconductor Industry Association are just a few of the industry groups.  ,
Concluding the Biden administration’s four-year efforts to boost the US chip sector, US Commerce Secretary Gina Raimondo told the Wall Street Journal on December 21 that” trying to hold China back is a fool’s errand”.
She claimed that China’s export controls were only” speed bumps” and could not slow China’s development of its own semiconductor capabilities. She claimed that the only way for the US to win the chip war is to out-innovate China and stay ahead of it.  ,
Liu Lanxun, a military columnist from Hubei, claimed that Raimondo finally admitted at the conclusion of her term that the US chip ban against China is a waste of time. However, he claimed that because China is also investing heavily in its chip industry, the US might not always succeed in the end.
Yong Jian contributes to Asia Times. He is a Chinese journalist who specializes in Chinese technology, economy and politics.
Read more about the anti-US chips campaign by China-based business groups.
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