China to Probe Charges of US Chip Dumping, Unfair Grants

Move prompted by protests from local industry players upset over US Chips Act

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BEIJING - China will investigate allegations that the US dumps lower-end chips and unfairly subsidizes its own chipmakers, in potentially one of Beijing's strongest retaliatory moves against American technology sanctions.

The government will look into the question of whether the US is giving its chipmakers an unfair advantage through incentives and grants, or illegally undercutting Chinese products, the Commerce Ministry said on Jan 16.

The probe was begun in response to protests from local industry players, the agency said.

Chinese chipmakers have complained about the US Chips Act, which provides funding of some US$39 billion (S$53 billion) to entice firms like Taiwan Semiconductor Manufacturing and Samsung Electronics to build high-end chipmaking capacity in America.

On Jan 16, China's chip industry body took aim at a cornerstone of the Biden administration's policy. "The US Chips and Science Act violates the fundamental principles of a market economy and caused profound and significant impact on the global semiconductor supply chain," the China Semiconductor Industry Association said.