China’s plan to dominate legacy chips globally sparks US probe

Under Joe Biden's direction, the US Trade Representative (USTR) launched a probe Monday into China's plans to globally dominate markets for legacy chips—alleging that China's unfair trade practices threaten US national security and could thwart US efforts to build up a domestic semiconductor supply chain.

Unlike the most advanced chips used to power artificial intelligence that are currently in short supply, these legacy chips rely on older manufacturing processes and are more ubiquitous in mass-market products. They're used in tech for cars, military vehicles, medical devices, smartphones, home appliances, space projects, and much more.

China apparently "plans to build more than 60 percent of the world's new legacy chip capacity over the next decade," and Commerce Secretary Gina Raimondo said evidence showed this was "discouraging investment elsewhere and constituted unfair competition," Reuters reported.

Most people purchasing common goods don't even realize they're using Chinese chips, including government agencies, and the probe is meant to fix that by flagging everywhere Chinese chips are found in the US. Raimondo said she was "fairly alarmed" that research showed "two-thirds of US products using chips had Chinese legacy chips in them, and half of US companies did not know the origin of their chips including some in the defense industry."

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