Commerce to assess Chinese dominance through review of legacy chip usage
The Commerce Department to Review Semiconductor Supply Chain to Address China’s Dominance
The Commerce Department has announced a comprehensive review of the semiconductor supply chain to assess the extent of China’s dominance. This survey, set to begin in January, will focus on ”legacy” chips, which are widely used in everyday technologies. The shortage of these chips during the pandemic contributed to the scarcity of automobiles.
Reducing Reliance on China
The Bureau of Industry and Security will gather data on chips received from Chinese manufacturers to limit the United States’ dependence on this strategic adversary. This initiative is part of the Biden administration’s efforts to strengthen domestic chip production and reduce reliance on China.
“We have observed concerning practices from China in expanding their legacy chip production and creating obstacles for U.S. companies to compete,” stated Commerce Secretary Gina Raimondo. “To address these concerns, the Department of Commerce is proactively assessing the U.S. semiconductor supply chain by collecting data on the sourcing of legacy chips.”
Legacy chips, as defined by the Commerce Department, are semiconductors that are 28 nanometers or larger.
Protecting Semiconductor Manufacturing Capabilities
The review follows a recent report by the Commerce Department that highlighted the country’s semiconductor manufacturing capabilities. Despite the United States accounting for half of global semiconductor revenue, production capabilities are at risk due to subsidies for manufacturing in other countries.
The Biden administration has implemented various measures to curb China’s access to semiconductor components. In October, it introduced sweeping restrictions on shipments of advanced chips and chipmaking tools. Additionally, grants have been provided to chipmakers across the country as part of the $280 billion Chips and Science Act, with a focus on those producing chips for F-35 fighter jets.
How will the review address vulnerabilities in the supply chain and promote diversification of suppliers and manufacturing capabilities
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The Commerce Department of the United States has recently announced its decision to undertake a comprehensive review of the semiconductor supply chain. The goal of this review is to address China’s dominant position within the industry and find ways to reduce its reliance on the country for crucial technology components. Semiconductors, also known as microchips or simply chips, play a critical role in various industries, including telecommunications, defense, automotive, and consumer electronics. They are the building blocks of modern technology, powering everything from smartphones to supercomputers. Due to their importance, countries with a stronghold on semiconductor production hold a significant advantage in global economic and technological leadership. China has made significant strides in the semiconductor industry over the past decade, rapidly becoming a major player in the production of chips. This growth has been fueled by heavy investments in research and development, as well as acquiring foreign expertise and technology through strategic partnerships and acquisitions. However, concerns have arisen within the United States and other countries about China’s dominance in the semiconductor supply chain. Many fear that this position could be leveraged for geopolitical advantage, compromising national security and undermining the competitiveness of other nations. To address these concerns, the Commerce Department has initiated a review to identify potential vulnerabilities, evaluate supply chain risks, and formulate effective strategies to mitigate them. This review will encompass the entire semiconductor ecosystem, from chip design and fabrication to packaging and testing. It will assess the various stages of the supply chain, with a focus on identifying critical dependencies and vulnerabilities. The goal is to identify areas where alternative suppliers or manufacturing capabilities can be developed to reduce dependence on China. In addition to diversifying the supply chain, the review will also explore strategies to enhance domestic semiconductor production and support the development of advanced manufacturing capabilities. By investing in research and development, fostering innovation, and providing the necessary infrastructure, the United States aims to regain its global leadership in the semiconductor industry. The Commerce Department’s review acknowledges the complexity of the semiconductor supply chain and the need for collaboration among stakeholders to achieve meaningful change. It will involve consultations with industry experts, technology companies, academic institutions, and foreign partners to gather insights and expertise in formulating comprehensive strategies. The outcome of this review will likely have a significant impact on the global semiconductor industry and the balance of power within it. It has the potential to reshape the dynamics of competition and create new opportunities for countries seeking to diversify their supply chains and strengthen their technological capabilities. Addressing China’s dominance in the semiconductor supply chain is a complex challenge that requires careful consideration of economic, technological, and geopolitical factors. The Commerce Department’s review signifies the United States’ commitment to protecting national interests, promoting innovation, and ensuring the resilience of critical technology sectors. As the review progresses, it is crucial for the United States and its allies to work together, leveraging their collective strengths and expertise, to create a more robust and secure semiconductor supply chain. By doing so, they can safeguard their economic competitiveness, protect national security interests, and maintain technological leadership in an increasingly interconnected world.
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