us scrutinizes china's chip sector: trade war intensifies?

2025-03-11 general

washington, Tuesday, 11 March 2025.
the united states is increasing pressure on china’s semiconductor industry. hearings are beginning today regarding china’s dominance in legacy chip manufacturing. china is projected to control 47% of the global market by 2027. us government data shows that two-thirds of us products use chinese chips. new restrictions could impact companies like tsmc. this investigation occurs amidst existing trade tensions. further economic friction between the two countries is possible.

potential tariff hikes and market impact

The united states trade representative’s office is holding hearings today to discuss potentially increasing tariffs on chinese-made legacy chips [1][3]. these chips are commonly used in everyday items, including cars, washing machines, and telecommunications equipment [1][3]. these hearings and potential tariffs could impact the global supply chain and increase costs for manufacturers relying on chinese semiconductors [1][5]. companies importing chinese chips may face higher expenses, potentially affecting their profit margins and stock performance [alert! ‘specific stock impacts not detailed in sources’]. Investors should monitor policy changes and their effects on specific companies.

china’s growing chip capabilities

China’s capabilities in mature process chip manufacturing are rapidly growing [1]. huatai securities forecasts a 27% average annual expansion in china’s 12-inch mature process capacity from 2024 to 2027 [1][3]. by 2027, china is projected to account for 47% of the global market share [1][3]. this growth has been fueled by both government investment and advancements in chip manufacturing technology [3]. the us investigation aims to address concerns about china’s increasing influence in the semiconductor industry and its potential impact on global trade [1].

expert opinions and geopolitical considerations

Experts suggest the us faces a dilemma [1][3]. while increased tariffs could harm chinese exports to the us, china’s reliance on us exports has been decreasing [1][3]. the us investigation is being conducted under section 301 of the 1974 trade act [1][3]. this is the same act that was used by the trump administration in 2018 to impose tariffs on a large number of chinese imports, which triggered a prolonged trade dispute between the two countries [1][3]. the hearings and potential policy changes come amid existing tensions in us-china trade relations, adding to the uncertainty for investors [1][3].

south korean chipmakers on alert

South korean chip companies, including samsung electronics and sk hynix, are closely monitoring the situation [1]. these companies have large-scale semiconductor plants in china [1]. while their primary businesses may not directly align with the us investigation’s focus, there is concern that increased us tariffs on chinese chips could indirectly affect them [1]. this could place pressure on south korean semiconductor businesses [1]. investors in south korean chip manufacturers should remain vigilant regarding potential ripple effects from us-china trade policies [1].

Bronnen

legacy chips china production