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Combating Chinese Legacy Chip Manufacturing: An Economic and National Security Imperative
By Charles Yockey Policy Analyst, Manhattan Institute, Visiting Lecturer & Researcher, Mathias Corvinus Collegium

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In recent years, China has heavily subsidized its legacy chip manufacturing capabilities.1 Although US sanctions have restricted China’s access to and ability to develop advanced AI chips, they have done nothing to undermine China’s production of “legacy chips,” which are semiconductors built on process nodes 28nm or larger. The prominence of these chips makes them a critical technological component in applications as diverse as medical devices, fighter jets, computers, and industrial equipment. Since 2014, state-run funds in China have invested more than $40 billion into legacy chip production to meet their goal of 70 percent chip sufficiency by 2030.2 Chinese legacy chip dominance—made possible only through the government’s extensive and unfair support—will undermine the position of Western firms and render them less competitive against distorted market dynamics.

Combating Chinese Legacy Chip Manufacturing: An Economic and National Security Imperative by Hoover Institution

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