The Office of the US Trade Representative will hold a hearing on Tuesday into older Chinese-made “legacy” semiconductors that could be subject to more US tariffs on chips from China that power everyday goods, from autos to washing machines to telecoms gear, according to Reuters. This move comes amid reports that the US may further escalate efforts to curb China’s burgeoning semiconductor industry. However, the effectiveness of these efforts in thwarting the ascent of China’s semiconductor industry remains questionable.
Despite these protectionist measures, it is becoming increasingly clear that the US may not be able to halt the progress of China’s semiconductor industry. The relentless pursuit of advancement in chip technology by Chinese firms, coupled with the development of a chip manufacturing industry built on China’s high-end manufacturing advantages, suggests that barriers might pose some challenges, but will not stop China’s trajectory.
As the US intensifies its crackdown on Chinese semiconductors, a notable trend has emerged: China’s integrated circuit exports are on the rise. This phenomenon underscores a critical point – Washington’s efforts to suppress China’s chip industry have not thwarted its continuous growth and expansion. The development of China’s semiconductor manufacturing, particularly in the realm of mature chips, is deeply rooted in the country’s comprehensive industrial foundation and well-established industrial systems. This domestic strength suggests that while external pressures may pose challenges, they are unlikely to derail the momentum of China’s semiconductor sector.
Boasting the world’s most comprehensive industrial ecosystem, China is reported to have the largest and most diverse manufacturing system globally, capable of consistently delivering a wide array of industrial products with high efficiency and low cost. Given the intricate nature of the semiconductor manufacturing supply chain – which encompasses design, packaging, testing and other critical stages – the robustness of China’s industrial framework provides essential support for the development of its semiconductor sector.
This integrated supply chain ensures that materials and components necessary for chip manufacturing can be swiftly allocated and supplied domestically, reducing both production costs and time. From this perspective, the advancement of China’s semiconductor industry is not only the inevitable outcome of decades of manufacturing development but also a testament to the cumulative progress achieved step-by-step.
It is somewhat ironic that the stringent US measures against the Chinese semiconductor sector have inadvertently catalyzed the evolution of China’s chip manufacturing capabilities. In recent years, China has made significant strides in establishing a comprehensive semiconductor supply chain. Although Chinese enterprises may still lag behind the global vanguard in certain aspects, they have made substantial progress in the overall capabilities across the entire semiconductor supply chain.
The evolution of China’s semiconductor manufacturing industry is casting a favorable light on the global manufacturing scene. On the one hand, advancements in chip manufacturing technology and reductions in costs are set to benefit downstream industries such as vehicles, green products and electronics manufacturing. This includes American companies that have established production bases not only in China but globally.
On the other hand, considering the highly international nature of the semiconductor supply chain, the expansion of China’s chip industry contributes positively to the global semiconductor ecosystem. For example, as reported by South Korean media outlets in 2024, amid the restructuring of global supply chains, South Korea’s reliance on China for essential minerals needed for semiconductors and other products has not diminished but rather increased.
While the development of China’s semiconductor industry is beneficial to the global economy, we should not expect that this will lead the US to cease or weaken its crackdown on China’s chip industry. Bloomberg reported in February that the Trump administration is planning to toughen semiconductor restrictions on China, continuing and expanding the Biden administration’s efforts to limit China’s technological prowess.
Chinese Foreign Ministry spokesperson Lin Jian stated that the US suppression of China’s semiconductor industry “will backfire and hurt the US itself as well as others in the end.”
A recent report on mature process chips released by the US Department of Commerce showed that Chinese-made chips account for only 1.3 percent of the US market. China’s chip exports to the US are far lower than its chip imports from the US. The data suggest that, contrary to Washington’s fixation on suppressing China’s semiconductor industry, collaboration offers a more meaningful path forward.
