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The United States is reviewing its semiconductor supply chain in response to concerns over importing Chinese chips.

The United States is reviewing its semiconductor supply chain in response to concerns over importing Chinese chips.

On Thursday, the U.S. Department of Commerce announced that it will conduct a survey of the American semiconductor supply chain and national defense industrial base in order to address concerns about national security posed by chips sourced from China.

The goal of the study is to determine the methods used by American businesses to obtain “legacy chips,” which include both current-generation and mature-node semiconductors. This is in response to the Department’s plan to distribute approximately $40 billion in subsidies for the manufacturing of semiconductor chips.

The department stated that the survey, starting in January, has the goal of minimizing national security threats from China. It will specifically examine the utilization and procurement of legacy chips manufactured in China within the supply chains of important industries in the United States.

On Thursday, the department released a report stating that over the past ten years, China has given the Chinese semiconductor industry approximately $150 billion in subsidies. This has resulted in an uneven playing field for foreign competitors, including the U.S.

Commerce Secretary Gina Raimondo said, “Over the last few years, we’ve seen potential signs of concerning practices from [China] to expand their firms’ legacy chip production and make it harder for U.S. companies to compete.”

The Chinese embassy in Washington D.C. stated on Thursday that the United States has been misusing export control measures and unfairly treating companies from other nations under the guise of national security. They also accused the U.S. of politicizing and weaponizing economic and scientific matters.

Last week, Raimondo stated her department would be granting approximately twelve awards for semiconductor chip funding within the next year. These announcements, which could amount to billions of dollars, have the potential to significantly alter chip production in the United States. On December 11, the first award from the program was issued by her department.

The Department of Commerce stated that the survey will aid in creating a fair competition for traditional chip manufacturing.

Raimondo stated that protecting the U.S. legacy chip supply chain from non-market actions by foreign governments is crucial for national security.

The U.S. Department stated that companies based in the United States make up approximately half of the total global revenue in the semiconductor industry. However, these companies face fierce competition due to foreign subsidies.

According to the report, producing semiconductors in the United States could be up to 45% more expensive compared to other countries. The report recommends providing ongoing assistance for building domestic fabrication facilities.

The statement suggested that the United States should implement lasting measures that encourage consistent development and updating of semiconductor manufacturing facilities, such as the investment tax credit that is currently set to expire in 2027.