The European Union is conducting two research to find out how China’s expanding production of older-generation semiconductors is affecting the country.  ,
The European Commission will do two studies covering major microprocessor- consuming industrial companies and the chip industry, both, in September, Reuters reported on Saturday ( July 6 ).  ,
The document, citing two unnamed sources, said the EC has now started seeking comments on the two study’s review issues.  ,
The EC may inquire with chip-consuming companies about where they get their so-called legacy chips, which refer to older, 28-nanometer chips and older, older chips. Separately, it may ask EU chipmakers about their products and prices, and their projections of the same data from their opponents, including the Chinese people.  ,
The EC had already announced in early April that it would conduct research to assess the” trustworthiness” of legacy cards used in everything from aviation to cars to home appliances and to look for evidence of market errors.
The Reuters report was released on July 5th, when the EC began levying provisional tariffs of up to 37.6 % on Chinese electric vehicles ( EVs ). In November, the EU will decide whether the more taxes will be lasting.  ,
Manufacturers and the Chinese government both declared they would engage in negotiations with the EU on the subject. China has so far launched anti-dumping investigations into European imports of meat and brandy. Spain and France are the two main producers of meat and vodka, respectively, in the region.  ,
The Bureau of Industry and Security ( BIS ) of the US Commerce Department announced last December that a survey would be launched in January 2024 to find out how US companies are sourcing both current and legacy chips.
The BIS claimed in a study that the Chinese government had spent about US$ 150 billion in incentives on its chipmakers over the past ten years, which it believed would result in a non-level worldwide playing field for US and other international companies.
Western Commissioner for Competition Margrethe Vestager stated that the EU will integrate with the US to conduct a deliberate survey on China’s tradition device issue after speaking with US Commerce Secretary Gina Raimondo at the fifth ministerial meeting of the EU- US Trade and Technology Council in Belgium on April 4.
A Chinese IT columnist writing under an Uncle Biao pseudonym claimed in an article published on Sunday that” China has built its mature chip industry with its huge downstream industry demand.” ” Even if the US and the EU join forces to suppress China with non-market means, they wo n’t be able to change the fact that China is about to occupy the legacy chip market.”
As long as China maintains its market open, it will not only dominate the market for legacy chips, but it will also pioneer technological developments in the advanced chip market, he wrote.
China’s global market share for mature chips will increase from 31 % at the end of last year to 39 % by 2027, according to a TrendForce analysis.  ,
China’s integrated circuit production increased by 32.7 % to 170.3 billion units in the first five months of this year from the previous year, according to the Ministry of Industry and Information Technology. China’s customs data shows its exports of integrated circuits grew 10.5 % to 113.9 billion units, over the period.
The Semiconductor Industry Association ( SIA ) reported on July 5 that the global semiconductor industry’s sales increased 19.3 % to US$ 49.1 billion in May 2024 from a year earlier. Year- to- year sales were up in the Americas ( 43.6 % ), China ( 24.2 % ), and Asia Pacific/all other ( 13.8 % ), but down in Japan (-5.8 % ) and Europe (-9.6 % ).  ,
Some commentators speculated that the duo may soon impose tariffs on China’s legacy chips despite the US and EU’s ongoing investigation.
” If the EU really imposes new restrictions or tariffs on China’s legacy chips, China will definitely launch countermeasures against European products”, Tan Haojun, a Jiangsu- based writer, opined in an article published on Sunday. ” The Chinese and European sides will suffer a lot,” he says.
Tan predicts that as China’s EU’s desire to repress China becomes more and more clear, the business environment there will become increasingly difficult for Chinese companies. He recommends that China expand its consumption markets to expand its domestic market share.
Chip buyers, including the German automakers, need China- made legacy chips, Christophe Fouquet, chief executive of chip- making equipment maker ASML, told Germany’s Handelsblatt newspaper in an interview published on July 8.
Legacy chip manufacturers are increasing significantly globally, but Western chip makers are not making enough money in the industry, which is not very profitable, according to Fouquet.
He claimed that Europe cannot even meet half of its own needs and that the West should look for alternative solutions if it wants to halt China’s legacy chip production.  ,
Read: China’s legacy chips to survive with price advantage
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