Investing.com -- China is launching an investigation into whether the United States is unfairly subsidizing its chipmakers and dumping lower-end chips, marking one of Beijing's most serious countermeasures against American technology sanctions to date.
Bloomberg News reported that the Chinese government will examine whether the US is providing its chip manufacturers with an unjust edge through incentives and grants, or by unlawfully undercutting Chinese products, according to a statement from the Commerce Ministry on Thursday. The investigation was initiated in response to complaints from local industry participants, the ministry stated.
While the ministry did not identify any specific companies, several US companies, including Texas Instruments (NASDAQ:TXN) Inc. and Analog Devices Inc (NASDAQ:ADI)., are recognized as leaders in the production of lower-end items such as power and analog chips. These chips are commonplace in contemporary devices ranging from automobiles to appliances, where they aid in power regulation and digital signal translation.
The probe by Beijing mirrors a long-standing grievance by the US, which alleges that China's government openly subsidizes its domestic companies in violation of international trade agreements. Officials from the US and Europe have also cautioned about the potential risk of Chinese firms, which are rapidly expanding their capacity in mature nodes, eventually saturating global markets with inexpensive chips.
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