US Braces for Chinese Dumping of Legacy ICs

The United States is bracing itself for an influx of legacy integrated circuits (ICs) from China, as concerns grow over the potential impact on the global market. Two Congressmen have recently written to US Secretary for Commerce, Gina Raimondo, expressing their worries that China is "on track to flood the United States and global markets with foundational semiconductors."

When referring to "foundational" chips, they are specifically referring to those manufactured on older nodes than 28nm. Currently, China controls approximately 30% of global capacity for chips in the 50nm to 180nm range. However, a report by the Rhodium Group suggests that within the next decade, China's control could increase to around 46%.

In response to this potential threat, the Congressmen are proposing import duties on ICs rather than duties on finished goods containing ICs. This approach aims to address the issue at its source and prevent an overwhelming influx of Chinese ICs into the US market.

To gain a better understanding of how US companies source legacy ICs, the Commerce Department is initiating a survey this month. This survey will provide valuable insights into the current landscape and help inform future policy decisions.

It is crucial for the United States to carefully monitor and manage the flow of legacy ICs from China. By implementing import duties, the US hopes to maintain a level playing field and protect its domestic semiconductor industry. The results of the Commerce Department's survey will be instrumental in shaping the country's approach to this issue and ensuring the long-term stability of the semiconductor market.