Countries such as the United States (opens in new tab) have been instrumental in introducing sanctions against China regarding the production of semiconductors. Reuters (opens in new tab) reports that China has launched a challenge to the World Trade Organization (WTO) against measures regulating the export of semiconductor chips.

The restrictions against China, passed by the U.S. in October, have already caused suppliers to stop doing business with China on national security grounds (opens in new tab). China's Ministry of Commerce said the sanctions "threatened the stability of the global industrial supply chain."

"China will take legal action within the WTO framework as a necessary way to address our concerns and protect our legitimate interests," the ministry statement said.

Some of these concerns are also true. While Taiwan will continue to dominate (open in new tab) the semiconductor industry for some time, China certainly has a lot of business in terms of buying up chips used in manufacturing. It is logical that such a flow-on effect could have real consequences for Taiwan (open in new tab) and the semiconductor industry as a whole.

That said, don't expect the rest of the world to back down anytime soon; according to Bloomberg (open in new tab), Japan and the Netherlands are likely to join this crusade. The two countries have agreed, at least in principle, and are expected to announce their own actions within the next few months.

China may now be going to the WTO to try to nip this problem in the bud before it gets too big. This process is likely to be a long one and is still only in its early stages.

Adam Hodge, a spokesman for the Office of the U.S. Trade Representative, said, "We have received requests for consultations [from the People's Republic of China] related to certain U.S. actions affecting semiconductors.

[14] "As we have already informed the PRC, these targeted actions are national security related and the WTO is not the appropriate forum to discuss issues involving national security," Hodge told Reuters in an emailed statement.

The U.S. also does not have a track record of working well with the WTO. It has blocked the appointment of WTO judges to resolve disputes (opens in new tab) and recently rejected the WTO's findings on a dispute with China over metal tariffs. Thus, even if China does get a favorable ruling, it remains to be seen what good it will do for its efforts.