China's Commerce Ministry said on Thursday that it would launch an investigation into US exports of so-called mature chips or legacy chips — used in cars to home appliances — over concerns that American companies were unfairly benefiting from subsidies.

"Companies have been exporting related mature-process chip products to China at low prices, harming the legitimate interests of the domestic industry," Beijing's Commerce Ministry said in a statement.

Subsidies giving US companies unfair advantage — Beijing

Unlike the high-end chips used to power artificial intelligence, mature node chips are larger and used for more mundane tasks, including home appliances and communications systems.

Beijing said domestic firms had accused the Biden administration of having "provided substantial subsidies to the chip sector, giving US companies an unfair competitive advantage.”

"The concerns of China's domestic industry are reasonable, and they have the right to request a trade remedy investigation," a ministry spokesperson said.

On Monday US President Joe Biden unveiled new export rules on advanced computer chips used in artificial intelligence.

The proposed framework is being seen as an effort to hinder rivals from accessing advanced technology. It builds on measures introduced in 2023 which limit the export of certain AI chips to China.

Beijing did not say when the probe would be launched, nor how long it would take.

kb/rmt (AFP, Reuters)