The United States is rapidly stepping up efforts to try to stem China’s progress in the semiconductor industry – vital to everything from smartphones to weapons of war.
In October, Washington announced some of the broadest export controls ever — requiring licenses for companies that export chips to China using American tools or software, no matter where in the world they are made.
Washington’s measures also bar US citizens and green card holders from working for certain Chinese chip companies. Green card holders are permanent residents of the United States who have the right to work in the country.
It is cutting a key pipeline of American talent to China that will affect the development of high-end semiconductors.
Why is the US doing this?
Advanced chips are used to power supercomputers, artificial intelligence and military hardware. See the article : Communiqué of the U.S.-Europe Group on Afghanistan – United States Department of State.
The United States says China’s use of the technology poses a threat to its own national security.
Alan Estevez, undersecretary of the US Department of Commerce announced the rules, saying that his intention was to ensure that the US did everything it could to prevent the acquisition of “sensitive technologies with military applications” by to China.
“The threat environment is always changing and we are updating our policies today to ensure we meet the challenges,” he said.
Meanwhile, China has called the controls “technological terrorism.”
Countries in Asia that produce French fries – such as Taiwan, Singapore and South Korea – have raised concerns about how this bitter battle is affecting the global supply chain.
And there have been three significant developments in the chip conflict in the past week.
More Chinese companies on the “entity list”
More Chinese firms on ‘entity list’
The Biden administration has added 36 other Chinese companies, including major chipmaker YMTC, to Washington’s “entity list. On the same subject : Alleged Russian cryptocurrency money launderer extradited to United States.”
It means that American companies need the permission of the government to sell certain technologies to them, and this permission is difficult to secure.
The US restrictions have far-reaching implications. Last week, UK-based computer chip designer Arm confirmed it would not sell its most advanced designs to Chinese companies including tech giant Alibaba because of US and UK controls .
Arm said it was “committed to adhering to all applicable export laws and regulations in the jurisdictions in which it operates.”
China complains to WTO
China has filed a complaint against the United States with the World Trade Organization (WTO) over its export controls on semiconductors and other related technologies. This may interest you : Russia bought weapons from North Korea for the war in Ukraine, says US intelligence.
This is the first WTO case that Beijing has brought against the United States since President Joe Biden took office in January 2021.
In its submission to the WTO, China claimed that the United States was abusing export controls to maintain “its leadership in the fields of science, technology, engineering and manufacturing.”
He added that the US actions threatened “the stability of global industrial supply chains”.
The United States said in response that the trade body “was not the appropriate forum” to resolve issues related to national security.
US Assistant Secretary of Commerce for Export Administration Thea Kendler said that “US national security interests require that we act decisively to deny access to advanced technologies.”
The complaint specifies that the United States has imposed restrictions on the export of about 2,800 Chinese goods, but only 1,800 of these have been allowed under international trade rules.
The United States has 60 days to try to resolve the matter. If not, China will be allowed to ask a panel to examine its case.
Earlier this month, the WTO ruled that US tariffs on steel and aluminum that were imposed by the US under former President Donald Trump violated global trade rules.
Two-thirds of all goods China sells to the United States are subject to tariffs.
The United States said it “strongly rejects” the ruling and has no intention of removing the measures.
Talk to Japan and the Netherlands
Talks with Japan and the Netherlands
Japan and the Netherlands could impose export controls on China – limiting the ability of Japanese and Dutch companies to sell advanced products to the Chinese market.
On Monday, the White House national security adviser, Jake Sullivan, said that the United States had discussions with the two main suppliers of equipment for the manufacture of chips around the adoption of similar American controls on Beijing.
“I’m not going to anticipate any announcements,” Mr. Sullivan told reporters. “I’m just saying we’re very pleased with the candor, substance and intensity of the discussions.”
From 2019: How the semiconductor shortage could be a problem for you
The US checks aren’t just aimed at chipmakers. They also affect manufacturers of chip manufacturing equipment.
Large companies in Japan or the Netherlands could lose a large and lucrative buyer of their high-end machines.
Peter Wennink, the chief executive of Dutch chip equipment maker ASML Holding NV, asked whether the Netherlands should restrict exports to China.
Mr Wennink said the Dutch government, in response to US pressure, had already prevented ASML from selling its most advanced lithography machines to China since 2019.
“Maybe [the US thinks] we should come to the table, but ASML has already sacrificed,” he told Dutch media.
What lies ahead
Chipmakers are also under pressure to make more advanced chips to support new products.
For example, Apple’s new laptop contains chips from industry leader Taiwan Semiconductor Manufacturing Company that measure 3 nanometers. To put it into perspective – a human hair is about 50,000 to 100,000 nanometers.
Analysts say the US controls could put China further behind other chip-making countries, even though Beijing has openly said it wants to prioritize semiconductor manufacturing and become a superpower in the sector.
The United States has already significantly isolated China’s chip industry, although the latest measures are not as broad as those announced in October.
In the first nine months of 2021, China imported 417.1 billion units of chips, down 12.8 percent year-on-year. China’s chip imports rose in 2021 as tensions between the United States and China over technology policy escalated and a global chip shortage caused many companies in China to stockpile supplies.
What caused the chip shortage 2022?
Will the chip shortage end in 2022? As a result, until the end of 2022 and into 2023, chip supplies are expected to be in surplus in many chip nodes, which analysts expect will be absorbed in large part of 2023 by customers.
What is the real reason for the chip shortage?
While the COVID-19 pandemic was the initial catalyst for the chip shortage, structural factors are also part of the picture. The auto industry has changed, with a big shift towards automation and electric vehicles. These also require more chips, causing more strain on an already stretched industry.
Can America produce chips?
The United States produces about 10% of the world’s semiconductor supply, but otherwise relies on East Asia for 75% of global production. The CHIPS Act also spurred Qualcomm to commit to spending an additional $4.2 billion on chips from GlobalFoundries’ New York facility.
Can the US make semiconductors? American semiconductor companies do most of their manufacturing (52 percent) in the United States. 3. Semiconductors are one of America’s manufactured exports, behind only airplanes and automobiles. The US semiconductor industry has a dominant position in terms of global market share.
Why can’t America make chips?
It takes GlobalFoundries three months on average to etch and turn mirror-smooth silicon wafers into layered semiconductors. Chipmakers say ending the shortage is difficult because it takes years to get new factories up and running. Even a single speck of dust can damage a chip.
Is the U.S. going to start making computer chips?
The CHIPS Act is designed to bring cutting-edge chipmaking back to the United States. President Joe Biden will sign the CHIPS and Science Act of 2022 into law on Aug. 9 in a Rose Garden ceremony, the White House said in a press statement Wednesday, a move that will flood $52, 7 billion in funding to US chipmakers over five years.
Is China dependent on U.S. for food?
| Agricultural sustainability in selected countries (2018) | ||
|---|---|---|
| country | FSI Agricultural Sustainability Ranking (out of 67) | Arable land (acres per person in 2016) |
| United States | 33 | 1.16 |
| India | 47 | 0.29 |
| China | 57 | 0.21 |
How much food does the US supply to China? In 2020, US agricultural exports to China totaled $26.4 billion, up $12.6 billion from 2019. China was the largest market for US agricultural exports, a position that last held in 2016.
What does China get from the US?
The main US commodity exports to China are oilseeds and grains, semiconductors and their components, oil and gas, and motor vehicles. Many states also generate substantial economic value from the export of services such as travel, education and financial services.
Is China dependent on food imports?
Soy is the only major crop where China is heavily dependent on imports – 84% of domestic consumption in 2021, mostly from the United States and Brazil, according to Citi.
