China is looking to challenge the U.S. in artificial intelligence. China’s tech giants have launched their own AI models.
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The Biden administration on Monday said it launched a new probe into legacy Chinese semiconductors that may go into 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 firms “to significantly harm competition and create dangerous supply chain dependencies in foundational semiconductors,” the White House said in a statement.
The so-called Section 301 investigation will look into China’s “acts, policies, and practices on the production of silicon carbide substrates or other wafers used as inputs into semiconductor fabrication,” the White House added.
Overall, Washington’s probe looks to assess the U.S. dependency on legacy Chinese chips in areas spanning everything from telecommunications to the electrical grid.
The new investigation marks an escalation of U.S. pressure on China’s semiconductor industry. To date, many of the actions taken by Washington have sought to target the most cutting-edge chips, in particular those used in the booming artificial intelligence sector.
So-called legacy chips are produced with less advanced manufacturing technique. Chinese manufacturers of chips still remain generations behind industry leaders like TSMC, but they are able to produce legacy chips at scale.
The latest investigation into Chinese legacy chips is being conducted under the Trade Act of 1974. One potential remedy that can be imposed under this law is placing tariffs on the products in question.
The Biden administration has continued to target China’s tech sector this year with increased import tariffs on products from electric vehicles to semiconductors. The latest action comes just weeks before the incumbent U.S. president hands over the reins to Donald Trump.
Reuters, citing Biden administration officials, reported on Monday that the probe into legacy chips will be handed over to Trump’s administration to complete.