Much of the public conversation about semiconductors is dominated by headlines on artificial intelligence, high-end processors and the geopolitical race for advanced manufacturing nodes. The spotlight rests squarely on cutting-edge CPUs, GPUs and the capabilities of the most advanced fabs in Taiwan, South Korea and increasingly the United States. These are undoubtedly important technologies, shaping the trajectory of AI and military applications alike.
But there is another battleground that can be found in the global semiconductor sector that may not be where most assume. It lies not in the esoteric world of 2-nanometer processors, but in the “boring” and often overlooked domain of analog and power management chips. These are the workhorses that connect digital systems to the physical world - conditioning signals, converting voltages, enabling sensors and powering the engines of electrification. China’s recent decision to launch anti-dumping investigations into U.S. exporters of analog integrated circuits highlights just how critical this substrate of the digital economy has become.
Why Analog Matters
Analog chips differ fundamentally from their digital cousins. While digital processors execute logic operations at breathtaking speed, they remain useless unless they can interact with the real world. That interaction depends on analog devices: chips that convert light, sound, temperature and motion into digital signals, or condition and deliver the power required to run motors, charge batteries and operate communication systems.
These chips are pervasive. They are found in electric vehicles, where they manage battery systems, drive motors and enable safe, isolated communications between subsystems. They are embedded in industrial automation, where sensors, actuators and motor drives require precise analog circuitry. They underpin telecommunications and networking equipment, converting signals and ensuring reliable power supplies. And they are integral to consumer electronics and the Internet of Things (IoT), where even the simplest connected device requires a suite of analog components.
Unlike high-end processors, analog chips do not depend on the very latest lithography. They can be manufactured on “mature node” production lines - 28 nanometers, 40 nanometers, even 90 nanometers and above. What makes them valuable is not transistor density but design expertise, reliability and integration with end-use systems. For this reason, analog chips have historically been the domain of specialised firms with decades of accumulated know-how, such as Texas Instruments, Analog Devices, and ON Semiconductor.
A Large and Growing Market
The global analog chip market today is worth on the order of US$90–100 billion annually, accounting for 12 to 16 per cent of total semiconductor revenues. While smaller in dollar terms than memory or logic, it is nonetheless a substantial share. Crucially, it is also poised for steady, long-term expansion.
Three structural drivers stand out.
First, the electrification of transport. Electric vehicles contain two to three times the analog and power semiconductor content of traditional internal combustion engine vehicles. As EV adoption accelerates, demand for battery management chips, gate drivers, power conversion ICs and automotive networking transceivers will grow commensurately.
Second, industrial digitalisation. Factories, logistics hubs and urban infrastructure are increasingly being equipped with sensors, connected devices and automated control systems. Each deployment expands the installed base of analog components. Importantly, once industrial customers validate a supplier’s chip for safety and reliability, they are reluctant to switch. The result is long product lifecycles and recurring revenues.
Third, the Internet of Things. Despite years of hype, IoT remains in its infancy. Tens of billions of devices are envisioned, but only a fraction have been deployed. Each IoT node requires analog front-ends, converters, amplifiers and power regulators. As IoT matures, the analog content will multiply, providing a durable growth engine for decades.
Put simply, the analog sector represents the substrate layer of the digital economy. High-end processors may make headlines, but without the analog infrastructure, they cannot function in the messy, physical world.
China’s Strategic Lens
From Beijing’s perspective, the analog market is attractive precisely because it is both critical and accessible. Competing head-on with U.S. and Taiwanese firms at the leading edge of digital logic remains a formidable challenge, constrained by export controls, extreme ultraviolet lithography and entrenched incumbents. China’s ecosystem remains in catch-up mode, though it is fair to say that for now, China has weathered the storm.
But analog semiconductors are a different story.
Analog production does not require the world’s most advanced fabs. It can be undertaken at mature nodes, where China already has significant manufacturing capacity in firms such as Hua Hong and SMIC. At the design level, Chinese firms such as SG Micro, GigaDevice and Will Semiconductor are scaling up capabilities in power management, automotive interfaces, and sensor integration. The technological barriers are real - analog design is as much art as science - but they are lower than those facing entry into the 2-nanometer race.
By launching anti-dumping investigations into American suppliers, China is signaling both defensiveness and ambition. Defensiveness, because its industrial ecosystem depends heavily on imported analog devices today. Ambition, because any duties imposed will accelerate import substitution, creating space for domestic firms to gain scale and credibility.
Implications for U.S. Suppliers
The four U.S. companies named in the investigation - Texas Instruments, Analog Devices, Broadcom, and ON Semiconductor - face varying degrees of exposure.
Texas Instruments is the most vulnerable. Around one-fifth of its revenues come from Chinese customers, and the bulk of its business is analog. Many of the products under scrutiny, such as RS-485 and CAN transceivers or gate drivers, are precisely the categories TI dominates. Analog Devices is similarly exposed, with large shares of its revenues tied to automotive and industrial markets. Its strength in precision converters and power devices overlaps with the focus of the investigation. ON Semiconductor is a major player in automotive power semiconductors, particularly relevant in China’s fast-growing EV sector. Duties could erode its competitive position just as it has been scaling its automotive franchise. Unlike the other three, Broadcom is comparatively less exposed. While it does have analog and mixed-signal businesses, much of its revenue derives from networking, broadband and software, areas less directly targeted by the probe. Nonetheless, it cannot remain unaffected given its substantial shipments into China.
In the short term, the impact could be absorbed as a margin squeeze or a re-routing of supply through non-U.S. fabs. But in the worst-case scenario, the consequences are structural - namely, loss of market share in China that is permanently captured by domestic suppliers.
The Bigger Picture
If anti-dumping duties are imposed, Chinese manufacturers of automobiles, industrial machinery and consumer devices will be encouraged - and in some cases compelled - to qualify local analog suppliers. Once designed in, these suppliers become difficult to dislodge. Over time, this process will entrench Chinese firms not only in their home market but also in export destinations along the Belt and Road and beyond.
For the United States, the risk is not a temporary dip in quarterly earnings for a handful of firms. It is the erosion of long-term participation in the largest structural growth curve of the semiconductor industry. While the media obsesses over AI processors, the quiet reality is that analog demand - tied to electrification, industrial digitalisation and IoT - will expand steadily through the 2030s. If U.S. firms lose their foothold in China, they risk ceding the commanding heights of this substrate layer to Chinese competitors.
Conclusion
The semiconductor industry is not monolithic. It is an ecosystem, and like any ecosystem, its health depends not only on its most glamorous species but on its foundational layers. Analog semiconductors are one such foundation. They connect the digital and physical worlds, enabling the very transformations - in energy, mobility, industry and communications - that define our century.
China’s anti-dumping probe into U.S. analog suppliers is therefore more than a trade skirmish. It is a signal that the strategic contest in semiconductors extends beyond the high-end frontier into the everyday workhorses of industrial growth. The real prize may not be who produces the fastest AI processor, but who secures dominance in the analog substrate that powers electrification, industrial automation and the still-nascent Internet of Things.
For policymakers and industry leaders alike, the message is clear. The future of semiconductors will be decided not only at the bleeding edge but in the less visible, steadily expanding markets that touch every corner of the global economy. To overlook analog is to misunderstand where the true center of gravity of the semiconductor age may lie.