US to Gather Chips Supply Chain Intel to Boost National Security

The United States said Thursday it would launch a review into how companies procure Chinese-made semiconductors, aiming to reduce national security risks posed by China.

The assessment will be launched in January 2024 and will focus on legacy chips — semiconductors that are not cutting-edge but still key to industries, said the Department of Commerce in a statement.

“Over the last few years, we’ve seen potential signs of concerning practices from the PRC to expand their firms’ legacy chip production and make it harder for US companies to compete,” said Commerce Secretary Gina Raimondo, referring to the People’s Republic of China.

Such semiconductors are needed in industries like telecommunications, the automotive sector and in the defense industrial base, she added.

With an eye on these concerns, the department will assess the US semiconductor supply chain by collecting data from American companies to gauge their reliance on chips manufactured in China.

This information will “inform our next steps in building strong, diverse, and resilient semiconductor supply chains,” Raimondo said.

In a report released this month, the bipartisan House Select Committee on the Chinese Communist Party urged the Commerce Department to impose import duties on legacy semiconductors from China.

“Urgent action is needed to prevent the PRC from dominating legacy chips, which would give the PRC excessive leverage over the modern global economy,” the committee added, as it called for a more aggressive approach to handling competition with China.

“Companies headquartered in the US account for approximately half of global semiconductor revenue but face intense competition supported by increasing subsidies from foreign governments,” said the Commerce Department on Thursday.