The Chinese Ministry of Commerce alleges that U.S. subsidies to semiconductor industry harm government-funded Chinese chipmakers.

Chinese chipmakers have complained about the U.S. Chips Act, which provides funding of some $39 billion to entice firms like Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. to build high-end chipmaking capacity in America. On Thursday, China’s chip industry body took aim at a cornerstone of the Biden administration’s policy.

China will launch an investigation into U.S. government subsidies to its semiconductor sector over alleged harm caused to Chinese mature node chipmakers, the commerce ministry said on Thursday. Unlike the cutting-edge chips that power artificial intelligence models,

China is launching an investigation into whether the United States is unfairly subsidizing its chipmakers and dumping lower-end chips, marking one of Beijing's most serious countermeasures against American technology sanctions to date.