Technology and politics

Chip war with China, new squeeze on tech and machinery exports from US. Beijing launches retaliation

The US has introduced more extensive export controls to date in an attempt to limit China's ability to create an advanced semiconductor industry and to slow the development of artificial intelligence with military applications

2 December 2024

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Joe Biden's administration, in a final national security offensive to halt a hi-tech advance by China seen as worrying, has triggered a sweeping new crackdown targeting the most sophisticated memory semiconductors used in artificial intelligence, supercomputers, cyberattacks and electronic surveillance, and more generally in the military and new arsenal design. The crackdown will come into force on 31 December.

In the crosshairs of the White House and its Commerce Department's export limits on sensitive technology, now in their third round of restrictions on the eve of the handover of power to the next President Donald Trump, are powerful chips as well as machinery for their production. More than a hundred Chinese companies, often dedicated to semiconductor development and manufacturing technologies, also end up in a category subject to trade restrictions. And Washington has pointed out that allies with a strong presence in the sector, the Netherlands and Japan, will participate by restricting the export of similar tech that has American components.

China: export restrictions on essential chip components

The reaction of China was immediate, which announced restrictions on the export of essential components for chip production to the US. Gallium, germanium, antimony, and other metals that could be used in dual technologies, i.e. for both civil and military purposes, are affected by these restrictions, according to a press release from the Chinese Ministry of Commerce, citing 'national security'.

The US, in more detail, introduced new export controls in an attempt to limit China's ability to create an advanced semiconductor industry and to slow the development of artificial intelligence with military applications. Export restrictions on key production tools will affect both US and foreign companies that use US technology in their chip-making equipment.

The US will also prevent the export of advanced high-bandwidth memory (Hbm), a key component in Ia chips, to China.

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US Commerce Secretary Gina Raimondo said the new controls, which follow two previous packages of measures passed in October 2022 and October 2023, are "revolutionary and radical". "These are the most stringent controls ever implemented by the United States to curtail the PRC's ability to make the most advanced chips it is using in its military modernisation," she said.

Chinese blacklisted suppliers

The Commerce Department will add 140 Chinese groups to the so-called 'entity list', a blacklist that requires companies in the US and other countries to obtain export licences that are expected to be virtually impossible to obtain. Companies on the list include chip manufacturers, such as Semiconductor Manufacturing International Corporation and Huawei, as well as Chinese companies that produce the equipment to make chips.

China has always denounced the moves on chips as an abuse of export control regulations and as discrimination against it. However, some observers and analysts have criticised the clampdowns as still inadequate: they came only after many months of debate and delays and amid pressure from technology giants to soften them and limit the number of Chinese entities and companies affected. Four chip machinery giants, Applied Materials, Asml, Lam Research and Kla, have quadrupled their lobbying expenses in the US this year compared to 2019, to over 4 million.

The sluggishness would, however, have allowed Beijing to gear up, inter alia, by building up stocks of the necessary machinery and chips and continuing to invest in a domestic supply chain. A number of Chinese factories and manufacturers also remained eventually off the US blacklist. And some older versions of the accused memory chips also remain excluded from the bans.

Marco ValsaniaGiornalista
- @ValsaniaM
- Email
Luogo: New York, Usa
Lingue parlate: Italiano, Inglese
Argomenti: Economia, politica americana e internazionale, finanza, lavoro, tecnologia
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