US’ planned curbs on chip exports seen as tech hegemony

The sales of semiconductor equipment reached $29.62 billion on the Chinese mainland last year, up 58 per cent year-on-year.

Ma Si and Wang Qingyun

Ma Si and Wang Qingyun

China Daily



September 14, 2022

BEIJING – Washington’s reported plan to broaden curbs on US shipments of artificial intelligence chips to China is an act of technological hegemony that will further weigh down on the global semiconductor industrial chain and harm the interests of US chip companies, officials and experts said on Tuesday.

Their comments came after Reuters reported that the United States Department of Commerce intends to publish new regulations next month to tighten export controls on key AI chips and chipmaking tools to China.

The planned move shows that the US is trying to take advantage of its technological edge to crack down on emerging markets and developing countries, Foreign Ministry spokeswoman Mao Ning said at a news conference on Tuesday.

What the US hopes for is to keep China and all other developing countries forever on the lower end of the industrial chain, which is not constructive, Mao said.

Reuters quoted anonymous sources as saying that the US Commerce Department’s new regulations will be based on restrictions communicated in letters earlier this year to three US companies — KLA Corp, Lam Research Corp and Applied Materials Inc. They were restricted from exporting chipmaking equipment to Chinese factories that produce chips with sub-14 nanometer processes unless they obtain licenses.

Zhong Xinlong, a senior consultant at China Center for Information Industry Development Consultancy, said it is crystal clear that the US government is adopting a series of well-calculated approaches to crack down on China’s fast-growing chip industry.

“Washington does not want China to make any progress on advanced chip technologies, but its politically motivated restrictions will deal a major blow to US chip companies, which bank on China, the world’s largest chip market, for revenue growth,” Zhong said.

The sales of semiconductor equipment reached $29.62 billion on the Chinese mainland last year, up 58 percent year-on-year, accounting for almost 29 percent of the global semiconductor equipment market, according to SEMI, a global semiconductor industry association.

Applied Materials got 33.8 percent of its revenue from the mainland in 2021, the largest share. Lam Research got 33 percent of its revenue there, also its largest share, according to the Chinese semiconductor industry website

Bai Ming, deputy director of international market research at the Chinese Academy of International Trade and Economic Cooperation, said such frequent rollouts of chip restrictions show Washington’s fear of China’s rapid progress in chip and AI industries.

The restrictions on high-performance AI chips are designed to limit the development of China’s AI computing power, which already exceeded that of the US last year, said Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center at Zhejiang University’s International Business School.

As the US tightens export control of chips, Chinese insurance companies are designing tailor-made insurance services to promote the use of crucial domestic chipmaking equipment and software, as part of the nation’s broader push to reduce reliance on US technologies.

“The export controls will motivate us to double down on resources to achieve breakthroughs,” said a senior executive from a Chinese chip company who declined to be named.

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