MK socks East China's Shandong Province, on January 20, 2025. Binzhou produces more than 5 billion semiconductor parts annually, with products widely used in various fields such as mobile phones, computers, home appliances, chargers, LED electronics and automotive electronics. Photo: VCG " src="https://www.globaltimes.cn/Portals/0/attachment/2025/2025-01-09/8b7f6db1-4674-4edd-91c0-d7d4cf7fb639.jpeg" />

Machines process semiconductor products at a manufacturing company in Binzhou, East China's Shandong Province, on January 20, 2025. Binzhou produces more than 5 billion semiconductor parts annually, with products widely used in various fields such as mobile phones, computers, home appliances, chargers, LED electronics and automotive electronics. Photo: VCG

Potential additional US tariffs on Chinese legacy chips, if implemented, will only further raise costs for US industries, while failing to curb China's chip industry, as Chinese high-performance chips hold substantial advantages in the global market, experts said.

The comments came as the Office of the US Trade Representative (USTR) was set to hold a public hearing on Tuesday US time "regarding the Section 301 investigation on China's acts, policies, and practices related to targeting of the semiconductor industry for dominance," the USTR said on Friday.

The hearing into older Chinese-made legacy semiconductors could heap more US tariffs on chips from China that power everyday goods from autos to washing machines to telecoms gear, Reuters reported. 

Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than chips used in artificial intelligence applications or sophisticated microprocessors. A 50 percent US tariff on Chinese semiconductors had already started on January 1, according to Reuters. 

If the new US administration decides to impose additional tariffs, relevant industry players, including those in the US, will face rising costs, Ma Jihua, a veteran telecom industry observer, told the Global Times on Tuesday, adding that the rising costs could further lead to a price surge for consumer products.

The US restrictions, expanding from high-end chips to legacy chips, would also create uncertainties for global players by affecting their research and development and industrial deployment, Ma said.

The US Commerce Department said in December that two-thirds of US products using chips had Chinese legacy chips in them, and half of US companies did not know the origin of their chips, including some in the defense industry, according to the Reuters report. 

Meanwhile, China's commerce ministry said in January that it would launch a probe into US exports of foundational semiconductors, which are also known as legacy or mature node semiconductors. A ministry spokesperson said at the time that relevant authorities will review applications and requests from the domestic industry in accordance with Chinese laws and regulations as well as WTO rules, and will initiate investigations based on legal procedures.

China's capacity and technology in storage chips are improving significantly, and while the US seeks to curb China's chip exports and production, China's high-performance chips hold substantial advantages in the global market, leaving the US in a dilemma, said Lü Xiang, a research fellow at the Chinese Academy of Social Sciences. 

"It is true that imposing additional tariffs on China would harm Chinese exports to the US, but our reliance on exports to the US market has been decreasing in recent years," Lü told the Global Times.  

In the first two months of 2025, China exported integrated circuits worth 180.44 billion yuan ($24.85 billion), an increase of 13.2 percent year-on-year, according to data from the General Administration of Customs. The data did not include specific numbers for exports to the US. 

The strong growth in chip exports showed that Chinese chips are now far less substitutable than before due to growing production capacity and capability; therefore, any additional US tariffs would ultimately be passed on to American manufacturers, Ma said. 

Global Times