U.S. gov't launches probe into ongoing China dominance of legacy semiconductor market amid concerns of Chinese vendors flooding the market

The Biden administration has launched a formal investigation into Chinese-made legacy semiconductors, citing potential risks to national security and critical infrastructure. The concerns stem from Chinese government-funded production that allows manufacturers to flood the market with prices that others can't compete with, along with ongoing security concerns and supply chain dependencies.

Legacy semiconductors, essential for industries like automotive, telecommunications, and defense, are manufactured using older production technologies. While much of the global focus has been on advanced chips for artificial intelligence, these legacy chips underpin countless everyday and industrial applications. The investigation highlights concerns over China's expanding dominance in this sector, fueled by substantial government subsidies.

According to a previous report, China has been aggressively investing in legacy chip production, using state funding to boost manufacturing capabilities through companies like SMIC (Semiconductor Manufacturing International Corporation). This has been a point of concern in the U.S. and Europe about over-reliance on Chinese technology, as these subsidies undermine global market competition.

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