US Department of Commerce to assess US semiconductor supply chain for national security.

Commerce takes action to bolster the U.S. semiconductor supply chain and protect U.S. national security

December 21, 2023 – The US Department of Commerce announced a new survey will be launched in January 2024 to serve as a foundation for ongoing analysis of the capabilities and challenges of the broader US semiconductor supply chain and national defense industrial base. The survey’s goal is to determine how US companies source current-generation and mature-node semiconductors, also known as legacy chips. This analysis will help shape US policy to strengthen the semiconductor supply chain, promote a level playing field for legacy chip production, and reduce the People’s Republic of China’s (PRC) national security risks.

“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.

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.”

The survey, which will focus on the use and sourcing of PRC-manufactured legacy chips in critical U.S. industries, will be launched by Commerce’s Bureau of Industry and Security (BIS). The survey is in response to findings in a Congressionally mandated report released this week that evaluates the capabilities of the United States’ microelectronics industrial base to support national defense. This report was produced in accordance with Section 9904 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021.

Companies headquartered in the United States account for roughly half of global semiconductor revenue, but they face intense competition from foreign governments, who are increasing their subsidies. According to the 9904 report, the United States should promote a level playing field for semiconductor manufacturing in the United States by supporting domestic fabrication, assembly, test, and packaging capabilities, continuing to protect U.S. technology through export controls, and further assessing potential non-market behavior. In May 2023, BIS completed data collection and developed the 9904 report and recommendations in collaboration with the CHIPS Program Office. The full study mandated by Section 9904 is available on the BIS website.

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