Many US Companies Don’t Know If They’re Using Chinese Chips, BIS Survey Shows
Nearly half of U.S. companies surveyed by the Bureau of Industry and Security this year said they didn’t know whether their products contained any Chinese-made, mature-node semiconductors, BIS said in a summary of those survey results released Dec. 6.
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BIS Undersecretary Alan Estevez said the survey shows that companies “remain shockingly unaware of the sources of chips used in their products.” He said “more action is needed to build strong, diverse, and resilient semiconductor supply chains.”
The survey, launched by BIS in January, was designed to give the agency more information about the amount and types of mature-node semiconductor devices, also known as legacy chips, that are made by Chinese foundries and used in American supply chains. The agency said it surveyed 97 companies that incorporate chips or chip-containing components into their products, representing "an estimated total chip content" of $111 billion, more than one-sixth of global chip sales value in 2023.
BIS said 44% of those surveyed companies were “unable to determine whether their products contained any” of those chips, while 17% said they were “able to affirm” their products contained no Chinese-made legacy chips.
BIS also found that more than two-thirds of the surveyed U.S. companies' products contain Chinese-origin legacy chips. Although this suggests Chinese-made chips in U.S. supply chains are “pervasive,” BIS also said their use is “shallow.” Those semiconductors account for only about 2.8% of all chips by count in U.S. companies’ products, and about 1.3% of all chips by value.
“In other words, even though [the People’s Republic of China] chips were present in the vast majority of surveyed companies’ products,” BIS said, “they currently make up a small proportion of the total chips in most individual products.”
The survey also showed that U.S. semiconductor suppliers have “minimal use” of Chinese-based foundries. BIS said it surveyed a separate group of 22 chip suppliers, finding that Chinese-made chips account for less than 2% of their total chip sales.
Even so, those American chip suppliers said they’re concerned about Chinese government measures designed to bolster the country’s domestic semiconductor industry. Several suppliers told BIS that “capacity expansion in China is beginning to cause pricing pressure,” and Chinese subsidies for its chip foundries, “as well as pressure to use PRC-origin content in China, may impact their competitive positions.”
Beijing also recently published new dual-use export control regulations, which include the Chinese equivalent of the U.S. foreign direct product rule, a measure that could potentially subject foreign firms to Chinese export licensing requirements if those firms deal in certain goods and technologies made in China or with Chinese-origin technology. Researchers said China could wield that new tool to affect American supply chains (see 2411140037 and 2410210042).
BIS said the survey findings will help “inform future U.S. government actions to address” Chinese oversupply concerns, “as well as companies’ lack of visibility into the supply chains for these critical semiconductor components.”