The U.S. Trade Representative will hold a hearing on Chinese legacy semiconductors, potentially imposing additional tariffs. Taiwanese semiconductor firms may benefit as Western clients reduce dependence on China. A Section 301 investigation aims to curb China’s semiconductor industry expansion and the downward pricing pressures it has introduced.

The U.S. Trade Representative is set to conduct a hearing regarding Chinese-made ‘legacy’ semiconductors on the 11th of this month, as reported by Economic Daily News and Reuters. This investigation, initiated during the Biden administration, aims to address the potential imposition of additional tariffs on these semiconductors, which are utilized in various sectors, including automobiles and telecommunications.

Earlier this year, the White House announced plans to increase existing tariffs on Chinese semiconductors from 25% to 50%, effective this year, indicating a significant shift in trade policy. This adjustment is expected to impact the global semiconductor market profoundly, particularly concerning Chinese legacy chips.

Taiwanese semiconductor companies, namely UMC and Vanguard International Semiconductor (VIS), are anticipated to gain from this transition as clients in the West seek to diminish their dependency on Chinese products. VIS Chairman Leuh Fang noted that this trend could positively affect VIS’s revenue, especially in the power management IC sector.

The U.S. Department of Commerce, in a disclosure from December, revealed that two-thirds of semiconductor products in the U.S. include legacy chips from China. Alarmingly, many U.S. companies, even within the defense industry, remain uninformed about the origins of the semiconductors they utilize.

Former U.S. President Joe Biden announced the initiation of a Section 301 investigation in December 2024 to scrutinize Chinese-manufactured legacy semiconductors. This inquiry focuses on tightening regulations surrounding China’s mature-node semiconductor industry to mitigate its rapid growth and the resulting pricing pressures in the global market.

The U.S. is poised to hold a pivotal hearing on Chinese legacy semiconductors, potentially leading to increased tariffs that could reshape international trade dynamics. Taiwanese semiconductor manufacturers may benefit from a shift in orders as Western clients reduce reliance on Chinese products. Additionally, the Section 301 investigation underscores the U.S. commitment to tightening controls over its semiconductor supply chain, which may have lasting implications for the industry.

Original Source: www.trendforce.com

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