China Tech Threat will soon release a new briefing paper titled “Every Chips Matters,” urging the U.S. government to aggressively protect domestic legacy chip capacity, alongside high-tech semiconductors.
Last month, Alan Estevez, Under Secretary for the Bureau of Industry and Security said, “Chips are a ubiquitous commodity at the legacy level.”
The problem with Mr. Estevez’s thinking is that legacy chips are critical to defense systems, automobiles, medical devices, consumer electronics, and more. As evidence, Mr. Estevez’s boss – Commerce Secretary Gina Raimondo – noted that Russia was repurposing computer chips from dishwashers and refrigerators on the Ukraine battlefield for military equipment.
Failing to defend this “ubiquitous commodity” invites the People’s Republic of China (PRC) to flood the international marketplace with underpriced alternatives, ultimately driving companies in democratic nations out of business.
The PRC is seizing the opportunity. Led by SMIC, the PRC’s national champion and known Chinese military collaborator, the Chinese government is spending billions with profound potential consequences, potentially forcing U.S. military systems to depend on PRC chips.
As former Deputy National Security Adviser Matt Pottinger described how a Chinese-dominated legacy chip market “would give Beijing coercive leverage over every country and industry – military or civilian.” The coming report not only explains the real danger, but provides several policy solutions for protecting legacy chips and the national security they deliver. Check back soon to read the report.