The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment.
The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1.
Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than chips used in artificial intelligence applications or sophisticated microprocessors.
Photo: Reuters
The US Department of Commerce in December last year said that two-thirds of US products using chips had Chinese legacy chips in them, and half of US companies did not know the origin of their chips including some in the defense industry.
The hearing comes as US President Donald Trump has called for the repeal of a US$52.7 billion law to boost US chips manufacturing. The CHIPS and Science Act, which the US Congress passed in 2022, has made awards to Intel Corp, Samsung Electronics Co, Micron Technology Inc, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and others.
The probe is being conducted under Section 301 of the Trade Act of 1974, the same unfair trade practices statute Trump invoked to impose tariffs of up to 25 percent on about US$370 billion worth of Chinese imports in 2018 and 2019.
Separately, Trump softened his stance on Taiwan’s semiconductor industry on Friday, just days after TSMC announced a US$100 billion investment in the US.
Speaking at the White House, Trump reiterated that Taiwan “stole” the US chip industry, but shifted the blame to previous administrations for allowing the computer chip production to move overseas.
“They stole it from us. They took it from us, and I don’t blame them. I give them credit,” Trump said. “I blame the people that were sitting in this seat because they allowed it to happen.”
He also recalled that Intel was once a dominant player under former CEO Andy Grove, but said it gradually lost its leadership, allowing Taiwan to take over the sector.
Following Grove's passing, Trump said, Intel had leaders who "didn't know what the hell they were doing," which led to the US losing its chip industry, now "almost exclusively in Taiwan."
Previously, Trump had threatened a 100 percent tariff on Taiwan’s semiconductor imports to the US, to encourage domestic chip production.
Trump hailed TSMC’s expansion as a major victory for the US because his government did not have to offer any subsidies, and criticized the CHIPS Act, calling it a waste of money.
He said that TSMC’s investment was driven by concerns over tariffs, rather than US government incentives.
Additional reporting by CNA
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