Chip Subsidy Clash: China's Probe Into U.S. Semiconductor Support

China initiates an investigation into the U.S. subsidies provided to its semiconductor industry, focusing on mature node chips. This move is in response to the competitive advantage gained by U.S. firms, adversely affecting China's domestic market. Potential impacts on U.S. companies like Intel are anticipated.

China has announced it will investigate U.S. government subsidies to its semiconductor sector, following requests from China's mature node chip industry. This action, disclosed by the commerce ministry on Thursday, highlights concerns over the competitive edge U.S. firms have gained in the market.

Unlike the advanced chips used in artificial intelligence, mature node chips are typically larger and utilized in less complex applications, such as household appliances and communication systems. China's commerce ministry criticized the Biden administration for granting substantial subsidies to its chip industry, leading to an unfair advantage and the export of these chips to China at minimal prices, which in turn has negatively impacted the rights and interests of China's domestic sectors.

The U.S. Department of Commerce has yet to comment on the investigation. This development mirrors earlier U.S. actions, including September's tariff increase on Chinese chip imports and a probe into China's chip industry last month. The outcome of China's investigation remains uncertain, but U.S. companies like Intel, which heavily rely on the Chinese market, may face repercussions. This situation intensifies amid Washington's recent tightening of export controls on advanced AI chips to China.

(With inputs from agencies.)