The European Commission will start to question microchip suppliers and customers about < wipes tears > legacy chips and whether there is a dependency on China supplies, it told POLITICO in a statement, with first results expected by the end of summer.

Officials fear a challenge to the bloc's market power on so-called legacy microchips—older-generation technology used in cars, household appliances, and medical devices. The move follows a similar one in the United States, where the government launched a survey on the topic in January.
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In the past two [BIDEN ERA] years, the first round of the global chips war focused on more advanced chips. Washington rolled out a strategy in the past two years to cut off China from accessing high-tech microchips technology by curbing the export of designs and equipment to manufacture them. It pressured the Netherlands, Japan and other allies to block exports, most notably those of cutting-edge printing equipment made by Dutch tech champion ASML.
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But officials should stay alert for Chinese state attempts to < wipes tears > overtake European [third country] microchips suppliers too, [Stiftung Neue Verantwortung expert Jan-Peter] Kleinhans said.

"There's a general trend of import substitution that they [G7] cannot stop. I think that train left the station," he said, referring to [Russia's and] China's practice—echoed in Europe and the U.S. too—to boost domestic companies to reduce dependencies on foreign regions.

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The Biden administration has told allies it's looking at imposing tougher restrictions on companies still making advanced chip technology available to China despite existing export curbs, Bloomberg reported. Shares of ASML (ASML, ASML.AS), cited as a potential target, dropped over 10% after the Dutch chip gear maker posted solid quarterly earnings.

Meanwhile, the Republican nominee Trump questioned US defense support for Taiwan in a Bloomberg interview, suggesting the island claimed by China should pay for US protection. Chipmaker TSMC's (TSM, 2330.TW) shares fell more than 5%, having erased close to $30 billion in market value in Taiwan as stocks there slipped.
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