In response to US sanctions and subsidies benefiting American chipmakers, China has announced countermeasures targeting the industry. Among the few American companies dominating this space, Texas Instruments (TI) stands at the forefront of China's investigation.
China's Ministry of Commerce claims US imports are undermining China's mature process chip industry. It particularly focuses on companies gaining an "unfair competitive advantage" through subsidies and government support, hindering the growth of domestic manufacturers.
TI's strong domestic manufacturing footprint
TI is one of the few American companies with robust domestic manufacturing capabilities. Having secured support from the CHIPS Act, the company has become a prime candidate for scrutiny under China's Ministry of Commerce. This positions TI firmly in the subsidized US mature process chip manufacturers category that the ministry claims is gaining an "unfair competitive advantage" through US government support.
Market dominance through strategic pricing
TI has built its reputation on strategic pricing approaches, particularly in the analog integrated circuit (IC) market. While the industry witnessed widespread price reductions on analog ICs in recent years, TI demonstrated remarkable resilience, maintaining a strong market position despite intense competition. Industry experts note that TI has consistently outperformed many local manufacturers in China's highly competitive semiconductor market.
Scope of China's investigation remains unclear
China's Ministry of Commerce has launched an investigation into US mature process chips, though specific regulations or restrictions remain unannounced. The investigation's precise focus and potential policy implications are still developing. This probe could significantly influence future trade dynamics between the two nations.
Potential impact on TI's operations
If China implements restrictions targeting TI, their effectiveness will face scrutiny. Industry experts emphasize that TI's analog ICs command market preference due to their reliable supply chains, technical superiority, and comprehensive after-sales support. Consequently, Chinese automakers and industrial sectors may struggle to reduce their dependence on TI's products.
Evolving market dynamics
While European and Japanese IDM giants have established substantial local production capacity in the Chinese market, TI's position remains vulnerable. Nevertheless, TI continues to pursue expansion in China despite the challenging business environment.
Growth sectors drive demand
China's electric vehicle, energy storage, and industrial sectors, coupled with emerging AIoT applications, continue to generate strong demand for IDM products. However, these foreign IDMs create significant competition for local Chinese analog IC manufacturers, intensifying market pressures.
New battleground in US-China tech rivalry
The semiconductor competition between China and the US has expanded beyond advanced processes to encompass mature technologies, creating more complex dynamics than previous confrontations. Chinese mature process products will likely encounter barriers entering the US market, while the impact of countermeasures on American IDMs operating in China remains a critical development to watch in 2025.