On September 13, 2023, China’s Ministry of Commerce announced a significant move in international trade relations by launching an anti-dumping investigation into specific analog integrated circuit (IC) chips imported from the United States. This critical step points to escalating tensions between the two economic giants, reflecting broader geopolitical strategies and market dynamics.
Background of the Investigation
The decision to initiate the investigation stems from an application made by a provincial semiconductor industry association, representing the interests of China’s domestic industry. Chinese officials express concern that the U.S. government’s application of export controls and national security measures has adversely affected Chinese chip products and the burgeoning artificial intelligence industry. The spokesperson for the ministry emphasized that these actions violate World Trade Organization (WTO) rules and compromise the rights of Chinese enterprises.
Focus of the Investigation
The investigation will specifically target commodity interface IC chips and gate driver IC chips manufactured using process technologies of 40-nanometer and above. This focus underscores the growing importance of these components in various technological applications, including consumer electronics, automotive systems, and industrial appliances. Preliminary evidence points to a troubling trend: between 2022 and 2024, imports of these chips from the U.S. witnessed a dramatic 37% increase, while prices plummeted by 52%. Such a phenomenon raises concerns about the sustainability of the domestic industry, prompting the need for protective measures.
Duration and Process of the Investigation
The Ministry of Commerce has outlined a clear timeline for the investigation, which is expected to conclude by September 13, 2026. However, under special circumstances, this period may be extended by six months. The ministry has assured that the investigation will adhere to statutory procedures, focusing on an objective and equitable evaluation of findings. This commitment aims to balance the interests of all stakeholders involved, ensuring that the process is transparent and just.
Additional Investigations and U.S. Trade Measures
In conjunction with the anti-dumping probe, the Ministry of Commerce also launched an anti-discrimination investigation regarding U.S. measures that impact China’s integrated circuit sector. Preliminary findings suggest that these actions could constitute prohibitive and discriminatory measures under Chinese trade laws. This dual approach reflects China’s strategic response to what it perceives as unfair trade practices by the U.S.
Support from the Industry
The China Chamber of Commerce for Import and Export of Machinery and Electronic Products has expressed strong backing for the Ministry of Commerce’s decisions. They have pledged support for the ongoing investigations and have called for Chinese enterprises to enhance technological innovation and industrial coordination. The goal is to foster a more robust and competitive semiconductor industry that contributes to global market stability.
Responses to U.S. Sanctions
On the same day as the investigation announcement, China vocally opposed the U.S. decision to add multiple Chinese entities to its export control list. Criticism from Chinese officials centered on the view that these sanctions not only undermine the rights of Chinese enterprises but also disrupt global supply chains, raising questions about the U.S.’s intentions amid upcoming economic and trade talks scheduled to take place in Spain.
Conclusion
The launch of the anti-dumping investigation on U.S. analog IC chips marks a crucial juncture in the ongoing trade tensions between China and the United States. As both nations continue to navigate complex geopolitical landscapes, the outcomes of such investigations and the responsiveness of their respective industries will have lasting implications. China’s proactive stance highlights its commitment to protect its domestic industries while fostering international cooperation for the development of a fair and orderly global semiconductor market.