A new chapter in the US-Chinese chip war is already being written

A surge of manufacturing capacity in mainland China has the United States government worried. “Over the last few years, we’ve seen potential signs of concerning practices from the People’s Republic of China to expand their firms’ legacy chip production and make it harder for US companies to compete,” said US Commerce Secretary Gina Raimondo in a statement announcing a survey “to identify how US companies are sourcing current-generation and mature-node semiconductors.” The analysis will inform decisions to protect the US legacy-chip supply chain, considered by Raimondo to be “a matter of national security.”

The Chinese capacity build-up is stoking fears that, after solar panel manufacturing, another Western industry will lose out to state-sponsored competition. “Western nations need a plan for when China floods the chip market,” economic historian Chris Miller wrote in the Financial Times this week. Clearly, another round of protectionist measures is in the making.