Is 2024 the year of the legacy chip?

It may be too early to tell, but the momentum is promising. The latest evidence comes from a Wall Street Journal exclusive on a letter from House CCP Select Committee leaders. 

In the letter, Rep. Mike Gallagher (R-WI) and Rep. Raja Krishnamoorthi (D-IL) call on the Biden administration to take “urgent action” to keep the PRC from dominating the legacy chip (also known as foundational chip) market. They warn, “If the United States becomes dependent on the PRC for foundational chips, our military and economic well-being may run the risk of being overly reliant on the Chinese Communist Party.”

We couldn’t agree more and are glad Gallagher and Krishnamoorthi called on Commerce Secretary Gina Raimondo and U.S. Trade Representative Katherine Tai to “us[e] all existing trade authorities … to counter the CCP’s move to flood our markets.”

With recent announcements from Commerce about CHIPS Act funding going towards domestic legacy chip production and a survey on how U.S. companies source legacy chips, Raimondo could be sympathetic to the letter. That would be a welcome change from the administration’s near exclusive focus on advanced chips. 

As we have written extensively, Every Chip Matters. The CCP isn’t thinking little. It’s thinking big and wants to dominate the semiconductor marketplace across the spectrum, not just the advanced segment. But a narrow focus on advanced chips has made it easier for the CCP to gain ground elsewhere. As WSJ aptly notes, “Most of China’s new chip factories focus on older-generation chips that aren’t affected by current U.S. restrictions.” To course correct, we need to close export control loopholes, leverage tariffs, and keep awarding CHIPS Act money fairly. Will there be enough momentum to course correct this year? We certainly hope so.

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