THE US Department of Commerce said on Thursday (Dec 21) it will launch a survey of the United States semiconductor supply chain and national defence industrial base to address national security concerns from Chinese-sourced chips.

The survey aims to identify how US companies are sourcing so-called legacy chips – current-generation and mature-node semiconductors – as the department moves to award nearly US$40 billion in subsidies for semiconductor chips manufacturing.

The department said the survey, which will begin in January, aims to “reduce national security risks posed by” China and will focus on the use and sourcing of Chinese-manufactured legacy chips in the supply chains of critical US industries.

A report released by the department on Thursday said China has provided the Chinese semiconductor industry with an estimated US$150 billion in subsidies in the last decade, creating “an unlevel global playing field for US and other foreign competitors”.

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 US companies to compete”.

China’s embassy in Washington said on Thursday that the US “has been stretching the concept of national security, abusing export control measures, engaging in discriminatory and unfair treatment against enterprises of other countries, and politicising and weaponizing economic and sci-tech issues”.

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Raimondo said last week she expects her department to make around a dozen semiconductor chips funding awards within the next year, including multi-billion US dollar announcements that could drastically reshape US chip production. Her department made the first award from the programme on Dec 11.

The Commerce Department said the survey will also help promote a level playing field for legacy chip production. “Addressing non-market actions by foreign governments that threaten the US legacy chip supply chain is a matter of national security,” Raimondo added.

US-headquartered companies account for approximately half of global semiconductor revenue but face intense competition supported by foreign subsidies, the department said.

Its report said the cost of manufacturing semiconductors in the US may be “30 to 45 per cent higher than the rest of the world” and it called for long-term support for domestic fabrication construction.

It added that the US should enact “permanent provisions that incentivise steady construction and modernisation of semiconductor fabrication facilities, such as the investment tax credit scheduled to end in 2027”. REUTERS