China wants to challenge the US in the field of artificial intelligence. Chinese tech giants have introduced their own artificial intelligence models to the market.
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On Monday, the Biden administration said it had launched a new study of older Chinese semiconductors that could find applications in everything from cars to household appliances and defense systems.
China “routinely engages in non-market policies and practices and industrially targets” the chip industry, which allows Chinese companies to “significantly harm competition and create dangerous supply chain dependencies for essential semiconductors,” the White House said in a statement.
The so-called Section 301 investigation will examine China's “acts, policies and practices relating to the production of silicon carbide substrates or other wafers used as inputs for semiconductor production,” the White House added.
Broadly speaking, Washington's investigation aims to assess U.S. dependence on older Chinese chips in areas spanning everything from telecommunications to the electric grid.
The new investigation marks an escalation of U.S. pressure on China's semiconductor industry. So far, many of the actions taken by Washington have been aimed at using cutting-edge chips, in particular those used in the dynamically developing artificial intelligence sector.
So-called legacy chips are produced using less advanced manufacturing techniques. Chinese chipmakers are still generations behind industry leaders like TSMC, but they are able to produce older chips at scale.
The latest investigation into Chinese chips is being conducted under the Trade Act 1974. One potential remedy that could be imposed under the Trade Act is the imposition of tariffs on the products concerned.
The Biden administration continued to focus on China's technology sector this year, increasing import tariffs on products ranging from electric vehicles to semiconductors. The latest action takes place a few weeks before the current US president hands over power to Donald Trump.
Reuters, citing Biden administration officials, reported on Monday that the investigation into older chips would be turned over to the Trump administration until it is completed.