US to survey semiconductor supply chain to take on China
The US Department of Commerce is launching a survey of the semiconductor supply chain to serve as a foundation for continued analysis of the capabilities, particularly the supply from China.
The survey this month by the US Department of Commerce aims to identify how US companies are sourcing current-generation and mature-node semiconductors, also known as legacy chips. This analysis will inform US policy to bolster the semiconductor supply chain, promote a level playing field for legacy chip production, and reduce national security risks posed by the People’s Republic of China (PRC).
Companies headquartered in the US account for approximately half of global semiconductor revenue but face intense competition supported by increasing subsidies from foreign governments.
A US report just before Christmas found that the estimated share of global activity carried out inside the United States for each stage of the semiconductor industry is 47% for R&D, 27% for design, 12% for Front-End Fabrication and under 2% for Assembly, Test, and Packaging. This has led to the development of a series of packaging hubs with funding from the CHIPS Act.
The Bureau of Industry and Security (BIS) within Commerce will launch the survey later this month with a focus on the use and sourcing of PRC-manufactured legacy chips in the supply chains of critical US industries.
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The survey is a response to findings in a Congressional report which assesses the capabilities of the U.S. microelectronics industrial base to support the US defence industry. The report recommends that the United States promotes a level playing field for semiconductor manufacturing in the United States through support for domestic fabrication, assembly, test, and package capabilities, continued protection of U.S. technology through export controls, and further assessment of potential non-market behaviour.
However US semiconductor companies are more reliant on sales to China than any other location, including the United States, with an estimated 30-40 percent of sales shipped to China and approximately 25 percent to the United States.
“Legacy chips are essential to supporting critical U.S. industries, like telecommunications, automotive and the defense industrial base. Addressing non-market actions by foreign governments that threaten the U.S. legacy chip supply chain is a matter of national security,” said Secretary Gina Raimondo.
“Over the last few years, we’ve seen potential signs of concerning practices from the PRC to expand their firms’ legacy chip production and make it harder for U.S. companies to compete,” she said.
“To get ahead of these concerns, the Department of Commerce is taking proactive measures to assess the U.S. semiconductor supply chain by collecting data from U.S. companies on the sourcing of their legacy chips. Government alone cannot create and sustain a robust supply chain – we need industry at the table. This survey will empower the Department with the data we need to inform our next steps in building strong, diverse, and resilient semiconductor supply chains.”
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