The Department of Commerce is launching a review into the supply chain through which U.S. companies source chips for their hardware products.

The review, which was announced today, will be carried out by the department’s Bureau of Industry and Security. Work on the project is set to begin next month. The review is a response to a recently published, Congressionally mandated report, also prepared by the Bureau of Industry and Security, that assessed the domestic chip industry’s ability to support U.S. national defense. 

The newly announced review has two main priorities. The first is to map out how U.S. companies source current-generation chips, or chips produced using the newest manufacturing technologies on the market. The review will also examine the supply chain for so-called mature-node semiconductors that are made on less advanced production lines.

One particularly major focus of the review is to analyze the “use and sourcing” of mature-node chips from China in critical U.S. industries. “Over the last few years, we’ve seen potential signs of concerning practices from the PRC to expand their firms’ legacy chip production and make it harder for U.S. companies to compete,” said Secretary of Commerce Gina Raimondo. “To get ahead of these concerns, the Department of Commerce is taking proactive measures to assess the U.S. semiconductor supply chain by collecting data from U.S. companies on the sourcing of their legacy chips.”

According to the Commerce Department, the review is intended to provide a foundation for “continued analysis” of the U.S. chip industry’s capabilities and the challenges it faces. The findings of this analysis will inform policymakers’ efforts to bolster the domestic semiconductor supply chain, tackle anticompetitive behavior and reduce national security risks posed by China.

The U.S. government will provide $52.7 billion in subsidies to the semiconductor sector through the CHIPS and Science Act that President Joe Biden signed into law last August. The legislation is designed to support chip production, research and workforce development initiatives. The more than 200 companies that have applied for a share of the funding so far include GlobalFoundries Inc., one of the top mature-node chip manufacturers in the U.S.

New York-based GlobalFoundries makes processors based on 14-nanometer technology as well as earlier manufacturing techniques. Its silicon can be found in data centers, carrier networks, cars and a wide range of other systems. GlobalFoundries sold 575,000 wafers’ worth of chips last quarter for about $1.85 billion.

The company is currently working to expand its focus beyond silicon processors to gallium nitride semiconductors. Such chips can withstand higher temperatures and voltages than silicon-based counterparts, which makes them more suitable for use in environments such as power grids. GlobalFoundries received $35 million in government funding earlier this year to advance its efforts to mass-produce gallium nitride chips. 

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