China has embarked on an anti-dumping investigation targeting American-made analog chips, alleging that U.S. manufacturers are undercutting local vendors by significantly lowering prices while saturating the market with mature-node components. This investigation specifically focuses on low-end integrated circuits (ICs) essential for various equipment including PC boards, routers, and power supply units (PSUs). The announcement comes at a crucial time, as U.S. and Chinese officials are gearing up for a new round of trade discussions in Madrid.
Initiated by the Ministry of Commerce (MOFCOM) on September 13, the investigation encompasses interface and gate-driver ICs produced using legacy manufacturing processes at 40nm or larger. The types of components under scrutiny include RS-485 and CAN transceivers, digital isolators, I2C expanders, and gate-driver chips vital for voltage regulation in CPUs, GPUs, and other high-demand devices. The filing from China specifies the relevant harmonized system (HS) codes and the exact categories of products being investigated.
Chinese authorities assert that imports of these components from the United States surged by 37% from 2022 to 2024, while the average price plummeted by 52%. This drop in pricing, they argue, has harmed the domestic industry. The petitioner for the probe is an industry group based in Jiangsu Province, who is advocating for the imposition of duties on these imported goods. The review period will look at transactions throughout 2024, with an injury timeline that extends back three years.
Traditionally, the semiconductor conflict between the two nations has focused on advanced AI chips and sophisticated manufacturing technologies. However, this inquiry zeroes in on commodity components that are integral to the functioning of motherboards and various electronic devices. If a duty regime is established, it could force Chinese manufacturers to either pay higher prices for U.S.-produced analog chips, seek out domestic alternatives, or explore other non-U.S. suppliers. This shift could have downstream effects on bill of material (BOM) adjustments and redesigns for products expected to launch in 2026.
In parallel with the anti-dumping inquiry, China has also launched an “anti-discrimination” investigation into alleged U.S. trade measures that may hinder the competitiveness of Chinese chip manufacturers in international markets. This separate inquiry will assess whether U.S. export controls and investment restrictions contravene global trade standards. Typically, such investigations are expected to wrap up within three months.
The pricing collapse of these analog chips may challenge the validity of Beijing’s claims. Notably, Texas Instruments, a major U.S. supplier affected by this situation, reduced its prices in 2023 to maintain its market presence in China. However, the overall trend in the market following the COVID-19 pandemic has been one of significant correction, driven by oversupply that has squeezed profit margins across the mature-node segment.
According to MOFCOM, the anti-dumping investigation is expected to conclude by September 13, 2026, with the possibility of extending the timeline by an additional six months if necessary. Provisional duties may be established well in advance of this timeline.
