China Turns Legacy Chips Into a Trade Weapon

"In the past week, China has unveiled a series of regulatory actions targeting American chipmakers. The most significant is an anti-dumping investigation into American legacy chips that power everything from cars and refrigerators to washing machines and data centers. Unlike cutting-edge GPUs, these chips rarely make headlines, but they are essential to powering everyday electronics. Crucially, this is also an area where Chinese firms have caught up."

"Then came antitrust action against Nvidia. China's market regulator publicly announced preliminary findings that suggest the company violated commitments it made during its 2020 acquisition of the Israeli company Mellanox. Days later, the Financial Times reported that the Cyberspace Administration of China told ByteDance and Alibaba to stop buying Nvidia's latest chips. And finally, Beijing also launched an anti-discrimination probe into US trade and industrial policy, accusing Washington of unfairly favoring its own chipmakers like Intel through CHIPS Act subsidies and tariffs."

"For anyone following the last five years of the US-China tech war, all this feels familiar-but upside down. Previously, it was Washington that kept inventing new tools to choke off China's access to advanced semiconductors: sweeping export controls, tariffs, investment reviews, and even personnel bans. Now, after years of playing defense, China is showing that it is prepared to use the same tool kit against its main geopolitical rival."

China initiated multiple regulatory measures aimed at U.S. semiconductor firms, including an anti-dumping investigation into legacy chips that power vehicles, appliances, and data centers. Chinese regulators allege American firms flooded the market with cheap legacy chips, potentially opening tariffs that would reduce U.S. competitiveness. Beijing also launched antitrust scrutiny of Nvidia's Mellanox acquisition, reportedly told Chinese tech firms to halt purchases of Nvidia's latest chips, and opened an anti-discrimination probe into U.S. trade and industrial policy citing CHIPS Act subsidies and tariffs. China is adopting tools previously used by Washington—export controls, tariffs, and reviews—to pressure American suppliers and create bargaining leverage.

Read at WIRED