The survey was designed to “create a level playing field for legacy chip production, and reduce national security risks posed by China”, it said.

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“The citing of national security is just a pretext to maintain US competitiveness in legacy chips,” Ma Jihua, a veteran telecoms observer, was quoted as saying on Friday in the Chinese nationalist tabloid Global Times. Ma said China has advantages including lower costs, faster research and development progress, and more diverse applications compared to the US.

China currently has 44 semiconductor wafer foundries in operation and a further 22 under construction, Taiwan-based integrated circuit (IC) research firm TrendForce said in a recent note. By the end of 2024, China will expand mature chip production at 32 foundries, it added.

Chinese customs data showed that the value of the country's US-bound exports of chips, such as processors and controllers, grew 17 per cent year on year to US$1.3 billion in the first 11 months. However, total US imports of China-made ICs declined 0.5 per cent to US$2.02 billion over the same period.

China’s state-sponsored expansion in mature chip-making, covering legacy chips made with 28-nanometre or older process technologies, has triggered concern from the US and the European Union, which have both offered generous subsidies to lure global foundries such as Taiwan Semiconductor Manufacturing Co and US chip giant Intel in efforts to reshore chip production.

The act, which was slammed as “chip hegemony” by Beijing, would have the effect of reducing China’s overall silicon capacity by 180,000 equivalent 12-inch wafers a month by 2025, according to ICWise, a Shanghai-based semiconductor consulting firm.

There is a growing consensus among semiconductor professionals in China that US chip export controls are meant to hobble China’s IC industry development under the pretext of national security.

In October, the Commerce Department intensified export controls on shipments of advanced semiconductors and chip-making tools to China, reinforcing a blizzard of such rules implemented over the past four years in a bid to cap the country's progress in advanced chip manufacturing at 14-nm for logic semiconductors.

In response, China has vowed to achieve higher chip self-sufficiency, with billions in state money being poured into the sector. Those efforts have started with the domestic substitution of parts and equipment for mature foundry processes because older foreign-sourced technologies are easier to replace.

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“China is focusing aggressively on mature process technologies such as 28-nm and older, particularly in response to export controls on advanced equipment by the US, Japan, and the Netherlands,” said TrendForce.

China’s global share of mature process capacity is expected to reach 39 per cent by 2027, up from 31 per cent in 2023, with room for further growth if equipment procurement proceeds smoothly, according to TrendForce. In contrast, China’s proportion of global advanced process capacity, defined as 14-nm and below, would drop to 6 per cent from 8 per cent this year.

TrendForce warned that China’s rapid expansion of mature process capacity would lead to a price war in products like image sensors and power management ICs, impacting Taiwan-based foundries.

“China’s chip sector has been a darling of investors and the expansion in mature processes was lifted by its electric vehicle industry, where demand is huge for chips like power management ICs,” said Brady Wang, an associate director with research firm Counterpoint, adding that pricing for mature nodes would come under downward pressure next year.