EU Considers Investigation into Use of Old Semiconductors from China... Joint Sanctions with the US Possible

Discussion Expected at April US-EU TTC

The European Union (EU) is considering an investigation into the use of legacy semiconductors from China by companies based in EU countries. Based on this, joint sanctions with the United States are expected to be discussed.

According to a draft working statement obtained by Bloomberg on the 18th (local time), the EU is discussing launching an investigation into how extensively Chinese legacy semiconductors have spread throughout the regional industrial network.

[Image source=Reuters Yonhap News]

Legacy semiconductors generally refer to semiconductors manufactured using processes of 28㎚ or larger. While not advanced semiconductor technology essential for artificial intelligence (AI), they are widely used in household appliances, smartphones, electric vehicles, and military sectors. They account for about 75% of the total semiconductor market. Amid the United States imposing export control measures to block China’s development of advanced semiconductors, China is focusing on the legacy semiconductor market and pouring massive resources into it. There are concerns that if China gains dominance in the legacy semiconductor market as it has monopolized over 80% of the global solar power panel market, it could pose a serious security threat to Western countries.

As part of last year’s economic security strategy, the EU Commission decided to assess the risks of countries pursuing different values weaponizing advanced technologies such as semiconductors and to take measures to address these issues.

Bloomberg evaluated that the EU Commission’s current investigation could be the first step toward jointly sanctioning Chinese semiconductors with the United States. Earlier this year, the U.S. began investigating its domestic companies’ semiconductor supply chains to understand how dependent American companies are on Chinese legacy semiconductors.

The draft states that the EU and the U.S. will continue to collect and share non-confidential information on non-market policies and practices as well as market information, and will consult each other on planned measures. It also mentions that both sides may consider joint or cooperative actions to address the distorted impacts on the global supply chain of legacy semiconductors. Although not yet finalized, the draft is expected to be discussed at the upcoming U.S.-EU Trade and Technology Council (TTC) meeting in Belgium next month.