China has initiated two investigations into U.S. semiconductor imports, a significant development reflecting the intensifying technological rivalry between the two global powers. The Ministry of Commerce announced the probes on Saturday, September 13, ahead of anticipated high-level trade discussions in Madrid between U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. Beijing states these investigations are a response to what it views as discriminatory practices by the United States against China's domestic chip industry.
The first probe is an anti-dumping investigation targeting specific analog integrated circuit (IC) chips imported from the U.S. This category includes commodity interface and gate driver IC chips, commonly produced by American manufacturers such as Texas Instruments and ON Semiconductor. The second investigation addresses alleged U.S. discrimination against China's semiconductor sector, a direct reaction to the U.S. adding 23 Chinese firms to its "entity list" on Friday, September 12. These additions impose restrictions on access to U.S. technology, with some firms accused of acquiring chipmaking equipment for China's leading manufacturer, SMIC.
These actions underscore the complex and often contentious nature of the U.S.-China relationship within the critical semiconductor arena. Both nations consider technological advancement vital for national security and economic prosperity. The U.S. government maintains that its measures, including export controls and tariffs, are necessary national security precautions to curb China's technological progress, particularly in areas like artificial intelligence and advanced computing. Conversely, Beijing interprets these actions as a deliberate strategy to impede China's growth and technological independence.
This dynamic has been a consistent feature of the bilateral relationship, with both the Trump and Biden administrations implementing restrictions on China's access to semiconductors. Past talks, held in various international locations, have typically resulted in temporary pauses on escalating duties, suggesting a recurring pattern of de-escalation followed by renewed tensions. The semiconductor industry, fundamental to modern technology across consumer electronics and advanced military applications, has become a central point of contention in this geopolitical contest.
The U.S. has been actively working to limit China's access to advanced chip technology, with measures progressively tightening. For example, in October 2022, the Biden administration imposed controls on the export of specific semiconductors and related equipment to China, with further restrictions implemented in 2023 and December 2024. These policies have reportedly impacted China's immediate chip production capabilities, with Chinese semiconductor output experiencing a decline. Simultaneously, these restrictions have prompted China to accelerate its efforts toward domestic semiconductor self-sufficiency, with companies like Huawei reportedly making strides in developing advanced chips without U.S. equipment.
However, the U.S. restrictions also pose significant financial risks for American chip companies. Projections from the U.S. Chamber of Commerce in China indicate potential annual losses in sales and jobs. Semiconductor equipment firms are particularly exposed, with a substantial portion of their sales directed towards China. This intricate interplay of national security concerns, economic competition, and technological ambition shapes the ongoing dialogue between the two nations, with the upcoming Madrid talks serving as a critical juncture for navigating these complex issues and potentially influencing the future trajectory of global technology and trade.