U.S. semiconductor export sanctions could be backfiring: China's output of legacy semiconductor chips grew by a whopping 40% in the first quarter of 2024, according to a report from SCMP. The massive surge in production suggests China could become the global leader in legacy chip production.
A big reason for the surge: There are no trade restrictions on 'mature chips,' or chips that utilize 28nm or older process technology. The U.S. government purposefully left these chips out of its sanctions to ensure supply chain resistance; these older chips are used extensively in a range of important devices, such as cars and basic electronics (e.g. toasters, phones, and medical equipment), and disrupting the supply chain could cause global issues. Also, the U.S. government determined that these chips do not pose a threat to national security (at least, not in the way newer chips do).
