China has used antitrust and anti-dumping regulations to curb American chipmakers after the United States added 23 Chinese firms to its Entity List for national security reasons.
Citing a preliminary investigation, the State Administration for Market Regulation (SAMR) said Monday that Nvidia, the world’s largest graphics processing unit (GPU) maker, violated China’s antitrust regulations, as it acquired Mellanox Technologies, a computer networking supplier, for $7 billion in 2020. It said it has started a further investigation into the case.
Last December, the SAMR launched an investigation into Nvidia’s acquisition of Mellanox Technologies.
US Commerce Secretary Scott Bessent said Monday that it was poor timing for Beijing to release its investigation of Nvidia as he and Chinese Vice Premier He Lifeng were holding trade talks in Madrid, Spain.
Besides, the Chinese Ministry of Commerce said in a statement on September 13 that it received the anti-dumping complaint from the Jiangsu Semiconductor Industry Association on July 23. It said it would start a full investigation into the case.
The ministry said four US firms, including Texas Instruments, Analog Devices, Broadcom and ON Semiconductor, have allegedly exported significant volumes of commodity interface integrated circuits (ICs) and gate driver ICs fabricated on mature nodes (40 nanometers and above) at sharply reduced prices, inflicting severe damage on Chinese producers.
From 2022 to 2024, imports of these chips reportedly surged by 37% even as their average prices fell by 52%, with preliminary data indicating dumping margins as high as 300%, said the ministry. US-origin chips controlled 41% of China’s market, it said.
Semiconductors that are 28nm or above are considered mature or legacy chips. Chinese chip makers, such as the Shanghai Manufacturing International Corp (SMIC), are familiar with the production of mid-end chips that are 14–28nm, with a limited production capacity for 7nm chips. Chips that are 5nm or below are in the high-end range.
Chinese firms sanctioned
Beijing’s decisions came after the US Commerce Department on September 12 added 32 firms, including 23 Chinese entities, to its Entity List for national security reasons.
The US Commerce Department’s Bureau of Industry and Security accused Shanghai Fudan Microelectronics and its several affiliates in Beijing, Shenzhen and Hong Kong, Shanghai Fukong Hualong Microsystem Technology Co, Shanghai Fuwei Xunjie Digital Technology Co and Sino IC Technology Co of acquiring or attempting to acquire US-origin items to support China’s military modernization.
It said Shanghai Fudan Microelectronics and Sino IC Technology received a “Footnote 4 designation,” meaning that they are now subject to the US Export Administration Regulations (EAR). It said the two firms produced high-performance computing chips for artificial intelligence and other dual-use applications, and that Shanghai Fudan Microelectronics had supplied technology to Russian military end users.
It also sanctioned two suppliers closely linked to the heavily sanctioned SMIC. They are GMC Semiconductor Technology (Wuxi) Co Ltd and Jicun Semiconductor Technology (Shanghai) Co Ltd.
The bureau said that GMC and Jicun acquired US-origin semiconductor manufacturing equipment on behalf of SMIC Northern Integrated Circuit Manufacturing (Beijing) Co and Semiconductor Manufacturing International (Beijing) Corp without the required US licenses.
“Under the pretext of safeguarding international order and national security, the US is in fact engaging in unilateralist and bullying practices, placing its own interests above the development rights of other countries,” a Ministry of Commerce spokesperson said Monday.
The spokesperson said Washington’s intention to sanction Chinese enterprises is questionable, given that Bessent and He planned to hold four-day meetings in Spain from September 14.
“The latest round of sanctions is a precision strike by Washington against China’s technology sector, following crackdowns on Huawei and SMIC in previous years,” said a Hebei-based columnist called Chanming. “China’s semiconductor sector is bearing the brunt, with 13 integrated circuit firms, including Fudan Microelectronics, now facing a potential cut-off from critical technologies.”
“Being tagged for high-performance computing chip applications means Fudan Microelectronics would be blocked not only from US technologies but also from any third-party products incorporating US intellectual property,” he added. “This long-arm jurisdiction could stop Fudan Micronelectronics from accessing electronic design automation (EDA) tools and wafer fabrication gear.”
Fudan Microelectronics said it had strengthened its strategic reserves of wafers and critical raw materials, expanding its inventory from about 600 million yuan at the end of 2020 to about 3.1 billion yuan (US435 million) by mid-2025, including 2.1 billion yuan in raw materials and work-in-progress.
It said it has started diversifying its supply chain and deepening collaboration with domestic and international partners since 2022 to enhance supply chain resilience and safeguard production capacity.
‘Winning a fair treatment”
Before the latest escalation, Washington had signaled a tentative thaw in the chip confrontation. In July, the US government allowed Nvidia to resume shipments of its H20 artificial intelligence chips to Chinese customers, a move widely interpreted by industry analysts as a goodwill gesture to stabilize trade ties ahead of the Bessent-He talks.
However, some Chinese commentators warned that the H20 chips could carry embedded backdoors enabling remote access or shutdown by US authorities. Beijing reportedly discouraged local companies from using the chips.
Now it accuses four American chipmakers of dumping legacy chips in China.
“This anti-dumping investigation is not simple retaliation. It is about winning a fair treatment for our semiconductor industry,” says another Hebei-based columnist. “US chipmakers could face steep anti-dumping duties within the next two to three years, which would create new opportunities for Chinese players.”
He adds that Chinese chipmakers must continue to boost self-sufficiency and improve their products’ reliability and precision.
Read: China having second thoughts on Trump’s Nvidia chip deal
Follow Jeff Pao on Twitter at @jeffpao3