China Starts Probing US Firms for Dumping Outdated Chips in China

On Saturday, the commerce ministry in China revealed that it was initiating an investigation geared at finding out whether American firms were dumping semiconductor chips into the country. The ministry says that probe is being started after domestic firms filed complaints.

This investigation will focus on interface integrated circuit chips as well as driver integrated chips, especially those leveraging a minimum of 40-nanometer process technologies. This investigation will last at least one year with the completion deadline set for September 13 next year. However, if circumstances warrant an extension, the probe may be extended by another six months after the September deadline.

A spokesperson for the commerce ministry emphasized that this investigation was triggered after an association representing provincial-level companies in the semiconductor industry filed their concerns. This association was acting on behalf of the local semiconductor industry in China. The complaint followed the rules and regulations of the World Trade Organization, as well as the applicable provisions under Chinese law, the official added.

According to the initial evidence adduced to support the complaint, a 37% increase in the import of the products under probe was registered in the years 2022-2024. As imports ramped up, prices plummeted by 52%, the complaint states. Consequently, prices on the domestic market collapsed and China-based manufacturers could no longer increase their production of similar products.

The ministry therefore wants to inquire into these complaints and reach a conclusion within the duration provided for the probe. In conducting the investigation, the government promises to be fair and objective while also protecting stakeholders’ rights throughout the process. The findings obtained during the inquiry will determine the ruling made.

While announcing the planned probe, the ministry spokesperson also commented about reports that the United States intends expand the list of China-based companies covered by existing export controls. The spokesperson said the country condemns such actions and those measures cast doubt on whether the U.S. is genuinely interested in reaching a trade agreement with China since there are scheduled talks to be held in Spain between the two nations. The unilateral decision to tighten export controls is counter to the spirit of the ongoing talks, the spokesperson added.

The list of companies to be added to those that cannot import American tech products includes firms in the trade logistics, aerospace, biotech and semiconductor industries.

Major players in the U.S. tech sector, such as Broadcom Inc. (NASDAQ: AVGO), will be watching these developments with great concern since they are likely to worsen the uncertainties facing the global market for cutting-edge tech products.

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