The outgoing Biden administration is taking another swipe at Chinese business practices, this time to investigate unfair trade practices in the semiconductor supply chain.
The U.S. government will take additional action to protect American workers and businesses from unfair trade practices in the semiconductor sector, support a healthy domestic industry and reduce national security risks in federal supply chains.
“The People’s Republic of China (PRC) routinely engages in non-market policies and practices, as well as industrial targeting, of the semiconductor industry that enables PRC companies to significantly harm competition and create dangerous supply chain dependencies in foundational semiconductors,” The White House said in a statement yesterday.
A government investigation by the U.S. Trade Representative will examine the PRC’s targeting of foundational semiconductors (also known as legacy or mature node chips) for dominance and the impact on the U.S. economy.
Semiconductors are seen as essential to key sectors of the U.S. economy; powering cars, medical devices, critical infrastructure, key aerospace and defense systems and the goods and services we rely on every day.
The probe will initially assess the impact of China’s acts, policies, and practices on the production of silicon carbide substrates or other wafers used as inputs into semiconductor fabrication.
As Chinese semiconductors often enter the U.S. market as a component of finished goods, the investigation will examine a broad range of the Middle Kingdom’s non-market acts, policies, and practices with respect to the semiconductor sector.
That includes to the extent in which semiconductors are incorporated as components into downstream products for critical industries such as defence and telecommunications.
The U.S. has been recently championing efforts to ensure more chips are made in America by American workers, in particular through US$2 billion CHIPS and Science Act funding and recently finalised funding agreements with global tech giants.
Graphite probe
The move comes on the back of raw materials producers such as Novonix (ASX : NVX) recently banding together to lobby the White House to investigate whether China is exporting natural and synthetic graphite used to make lithium-ion battery anode material at unfair prices and slap on a 920% tariff increase.
Graphite, of which China controls 90% of global output, is seen as a critical mineral in many other applications for its conductiveness to electricity and heat resistance, meaning it’s used extensively across various industries.