Europe Asks Businesses About China's Older Chips

Amsterdam/London, July 5 (Reuters) – According to two sources familiar with the matter who spoke to Reuters, the European Commission has initiated discussions with the semiconductor industry in the region to gather opinions on China’s increased manufacturing of older generation computer chips.

The EU executive is seeking input in preparation for two voluntary surveys scheduled for September, aimed at both chip manufacturers and major industrial firms that heavily rely on chips. Confirming these developments, a spokesperson on Friday stated that the Commission had commenced a “focused consultation with the industry to explore the continued use of legacy chips in supply chains.”

In an email reply, the spokesperson mentioned that the EU and US might “work together on solutions to reduce reliance or unfair impacts.” The outcome of the study’s findings remains uncertain, but there are growing tensions between Brussels and Beijing as the EU looks to safeguard its industries against Chinese competition. On Friday, the Commission started implementing temporary tariffs, ranging up to 37.6%, on Chinese electric vehicles.

The European Commission is asking for feedback on draft questions, including where industrial firms get their chips. They want details on chip firms’ products, prices, and estimates from competitors, including those in China.

For equipment suppliers like ASML, China’s increase in legacy chip production offers revenue amid U.S. export restrictions on advanced tech. Chipmakers like Infineon, STMicroelectronics, and NXP face mixed prospects; they’re key in car and infrastructure chips but also contend with rising Chinese competition while doing business in China.

Industries like aerospace, automotive, health-tech, and energy in Europe might hesitate to reveal their use of Chinese chips, given the complex, global nature of chip production. German automakers oppose tariffs on Chinese EVs due to their significant sales in China. They’re diversifying chip suppliers to include both Chinese and non-Chinese sources after pandemic-related shortages.