Pressmediaofindia
Related Articles
06-04-2024
WASGINGTON/ LEUVEN, BELGIUM: The United States and the European Union committed to extend by three years their cooperation on identifying disruptions in the semiconductor sector, with a particular emphasis on mainstream “legacy” chips from China.
The two sides concluded a two-day session of their Trade and Technology Council on Friday with l2-page joint statement on the meeting’s outcomes.
It said the two partners would share market intelligence about “non-market” policies and practices, which they argue prevail in China, and consult on planned action to address distortions on the global supply chain.
European Commission Vice President Margrethe Vestager, who oversees EU policy on technology, said the EU and US were taking “the next steps” regarding legacy semiconductors.
US Commerce Secretary Gina Raimondo told a news conference that China was producing some 60% of legacy chips, found in cars, household appliances and medical devices, and would continue to do so in the coming years “and we know there’s a massive subsidization of that industry on behalf of the Chinese government which could lead to huge market distortion and so that’s why we’re focused on it,” she said.
The Commerce Department has already launched a survey to assess market distortion, she said, adding that the EU would do a similar exercise soon, with the two set to share their results.
The two partners have also committed to join forces in research to find alternatives to per and polyfluoroalkyl substances (PFAS) in chips. The “forever chemicals” do not readily break down and studies show they can harm human health.
Legacy chips, used in everything from washing machines to cars and TVs to medical devices, may not be as powerful as the state-of-the-art semiconductors that power artificial intelligence (AI) platforms but they’re a growing headache for the United States and European Union due to China’s market dominance.
Washington has already blocked Chinese firms from accessing Western-designed cutting-edge chips in the hope of delaying Beijing’s ambition of becoming a technology superpower. Attention has now turned to so-called legacy chips, of which China currently has close to a third of the world’s manufacturing capacity.
Faced with limited access to the more advanced chips, Beijing has sharply stepped up investments in the production of mature chip technology. In September, the Chinese government announced a $40 billion (€37 billion) state-backed investment fund to bolster domestic semiconductor production. That move strengthened industry calls for Western nations to take action to shore up their own chipmakers.
“(Current US) export controls only apply to advanced technologies, with the impact on mature technologies limited,” Joanne Chiao, an analyst at the Taiwan-based chip research house TrendForce, told media.
In December, the Biden administration ordered a review of the entire semiconductor supply chain to assess China’s dominance of legacy chips. A meeting of the EU-US Trade and Technology Council, held this week in the Belgian city of Leuven, could prompt a similar review by the European Commission, the EU’s executive arm. (Int’l News Desk)
