Europe seeks industry views on China’s older generation chips

AMSTERDAM/LONDON: The European Commission has begun canvassing the region’s semiconductor industry for its views on China’s expanded production of older generation computer chips, two sources familiar with the matter told Reuters.

The Commission, the EU executive, has sought feedback ahead of two voluntary surveys for the chip industry and major chip-using industrial firms that will be due in September.

A spokesperson on Friday confirmed the Commission had begun a “targeted consultation (with) the industry to assess further the use of legacy chips in supply chains”.

In an emailed response to questions, the spokesperson said the EU and US may “develop joint or cooperative measures to address dependencies or distortionary effects”.

It is unclear what action will result from the study but tensions between Brussels and Beijing are already rising as the European Union seeks to protect its industries from Chinese competition.

The Commission on Friday began imposing provisional tariffs of up to 37.6 per cent on Chinese electric vehicles.

Trade analysts say the tariffs could be just the start of a toughened EU stance towards Beijing.

Chinese industry is investing heavily in expanding production of older chips, known as legacy chips, with help from state subsidies. That’s in part because US-led restrictions limit its access to buying or making more advanced computer chips.

In the short run, China’s investment will lessen its dependence on foreign chips but Western governments are worried about the long-term implications, including potential oversupply of the chips needed for countless appliances and cars.

The Commission’s antitrust chief Margrethe Vestager indicated in April the executive might investigate legacy chips after a meeting in Belgium with US officials, including Commerce Secretary Gina Raimundo.