China Distorting Legacy Chip Market

Commerce Secretary Gina Raimondo is raising concerns that China is distorting the market for mature node semiconductors by overproducing the chips.

She told investors at a roundtable discussion that China’s non-market actions are preventing US companies and those in in US ally countries, from competing on a level playing field.

To combat China’s practices, Ms. Raimondo said the Administration will continue to impose targeted tariffs on semiconductors imported from China.

The Administration also is conducting an industrial base survey of the US semiconductor supply chain, engaging in joint efforts with international partners and restricting the use of Chinese semiconductors in US government procurement.

“Investors discussed how companies are thinking about oversupply and over-concentration risk, and how additional US government actions could most effectively support resilient semiconductor supply chains,” according to a readout from Commerce.

Separately, Commerce announced yesterday it has signed a non-binding preliminary memorandum of terms with South Korea’s SK hynix to provide up to $450 million in proposed federal incentives under the CHIPS and Science Act to establish a high-bandwidth memory advanced packaging fabrication and research and development facility.

The proposed investment builds upon SK hynix’s investment of approximately $3.87 billion in West Lafayette, Indiana, to build a memory packaging plant for artificial intelligence products and an advanced packaging R&D facility, creating approximately 1,000 new jobs and filling a critical gap in the US semiconductor supply chain.