Every Chip Matters: The Looming Chinese Legacy Chip Monopoly


Today China Tech Threat unveiled a new resource – EveryChipMatters.com – which includes both a quick :30 explainer video for busy people and a 16-page research report for policy experts.

China Tech Threat summarizes the problems surrounding a potential Chinese-dominated legacy chip market and provides three solutions to address it.

When it comes to semiconductors, the U.S. government has focused almost exclusively on restricting China’s ability to produce advanced chips, while ignoring legacy chips. Recognizing the American retreat, SMIC, China’s top manufacturer, is spending billions to conquer the market, and is likely benefitting from Chinese government subsidies.

Consequently, China’s impending monopoly threatens U.S. economic and national security in several ways:            

  1. It will force our military and businesses to rely on Chinese chips.
  2. It will expose Americans to new China-centric supply chain vulnerabilities.
  3. It will give Beijing new opportunities to spy, hack, and steal.

The good news is that we can do something about it:

  1. The Commerce Departments’ Bureau of Industry and Security can slam the door shut on SMIC’s growth by implementing a presumption of denial policy for all tech exports destined for the company and other Chinese legacy chip manufacturers.
  2. Congress can amend Section 5949 of the NDAA to prohibit Chinese chips from entering U.S. defense systems and critical infrastructure.
  3. The U.S. Trade Representative can leverage Section 301 of the 1974 Trade Act to defend national security through tariffs on Chinese legacy chips.

Legacy chips are already found in virtually every electronic device. With the 5G-Internet of Things era upon us, their presence is only going to expand. China is positioning itself to dominate this crucial technological battleground, just as it is doing with virtually every other technology.

The time is now for American policymakers to defend American national and economic security. Visit EveryChipMatters.com to learn more.