This month Frontiers of Freedom’s president and CEO, George Landrith, testified before the Office of the United States Trade Representative about the Chinese Communist Party’s (CCP) national efforts to control global production of Silicon Carbide (SiC) wafers and substrates—a critical input into semiconductors.
Because of their advanced efficiency and durability in demanding conditions, SiC chips are used in a wide range of applications, including healthcare equipment, renewable energy systems, heavy machinery, and defense systems. China’s steady gains in the SiC market threaten to create dependence on the country’s chipmakers, which threatens U.S. supply chains and could “pave the way for [Chinese] military domination,” Mr. Landrith said.
The Department of Commerce reported last year that two-thirds of American products contain Chinese chips, and half of U.S. companies don’t know the origin of their chips—including in the defense sector.
Notably, none of the individuals who testified during the hearing disagreed that SiC is a critical strategic manufacturing element.
The Chinese government—which broadcasts its goal to control the world’s high-tech industries—knows how important SiC is. The CCP employs massive state subsidies, labor exploitation, and over-capacity to drive competitors out of the market.
China’s “dramatic” ramp-up of SiC production caused global prices to “collapse,” DIGITIMES Asia reported last October. Six-inch and eight-inch SiC substrate prices fell as much as 20% and 50% by the end of last year, respectively. And the Chinese government shows no signs of changing its strategy. More than 70% of SiC patent applications filed in 2023 were made by Chinese entities, which its government “has been strongly encouraging.”
The CCP “is using the same playbook it has before to power its own growth at the expense of others by continuing to invest despite excess Chinese capacity and flooding global markets with exports that are underpriced due to unfair practices,” the Director of the White House National Economic Council said last year.
U.S. exports controls have failed to contain the CCP’s global ambitions, and, ironically, have contributed to China’s growth in the legacy chip market. President Trump and his administration are firm advocates of tariffs on foreign-made products—which prior administrations have also used. Tariffs are a key lever to prevent China from usurping the United States’ competitive advantage in this critical field.
Tariffs should be targeted at products with PRC-produced SiC, not just components like wafers with PRC SiC, to level the playing field for U.S. manufacturers and protect one of the United States’ last strategic advantages over our biggest rival.
This is a national security issue, Mr. Landrith concluded. “I hope that the U.S. Trade Representative will complete this investigation and move immediately to implement restrictions to protect the free-market competition of the United States and make sure that we have the national security elements we need—because chips will be among those.”