In this illustrated photo taken on February 17, 2023, the Chinese flag is raised next to a “Made in China” sign on a printed circuit board containing a semiconductor chip.
Florence Lo | Reuters
This comes after the United States in October last year tightened restrictions on exports of advanced semiconductors and chip-making tools to China, based on previous rules. The US government is concerned that the Chinese government could use these advanced chips for artificial intelligence or military applications.
“I wouldn’t be surprised if there were more.” [U.S. restrictions] Because we are still in the midst of this retribution. And there are a lot of hawks in the United States who are really concerned about China’s military buildup,” Dan Hutchison, vice chairman and senior fellow at TechInsights, said on CNBC’s “Squawk Box Asia” on Tuesday.
The Chinese government condemned the Dutch government’s move and called on the Netherlands to “adhere to an objective and fair position and market principles.”
China’s Ministry of Commerce said last week that the United States was using export controls as a tool, adding that it was “very concerned about direct U.S. intervention” in the issue of Dutch companies’ high-tech exports to China.
“This is further evidence that the US government, as well as other Western countries such as the Dutch government, will continue to gradually tighten the restrictions we have seen on both chip manufacturing equipment and advanced semiconductors.” said author Chris Miller. He spoke to CNBC’s “Squawk Box Asia” in early January about the “chip wars.”
In October, the US banned Nvidia from selling A800 and H800 chips made specifically for the Chinese market.
Nvidia’s less powerful A800 and H800 chips were developed after the U.S. government banned shipments of A100 and H100 chips, advanced graphics processing units sold to enterprises, to China starting in August 2022. Ta.
and [U.S.] With elections looming and political tensions continuing across the Taiwan Strait, it is difficult to imagine any meaningful lifting of restrictions. If anything, I think it will become even more tightened.
daniel newman
Principal Analyst, Futurum Research
This prompted NVIDIA to launch an even weaker chip in China in December to comply with U.S. export regulations.
“The U.S. government has indicated that it plans to periodically introduce new export controls that close loopholes,” Miller said.
According to customs data released on Friday (January 12), China’s integrated circuit imports in 2023 plummeted in response to U.S. regulations, dropping 15.4% year-on-year to $349.4 billion in 2023. Shipments also fell by 10.8%, according to the data.
“and [U.S.] With elections looming and political tensions continuing across the Taiwan Strait, it is difficult to imagine any meaningful lifting of restrictions. If anything, we expect further tightening,” Daniel Newman, principal analyst at Futurum Research, told CNBC last week.
According to a January 10 statement, China opposes Taiwan’s independence and urges the United States to “stop providing arms to Taiwan.”
Efforts by Western countries to halt China’s high-tech advances have led the economic giant to look to domestic companies to become more independent.
Since 2019, the United States has imposed sanctions on Chinese high-tech companies such as Huawei and SMIC, China’s largest semiconductor maker, forcing the Chinese government to revitalize its domestic industry.
According to Shanghai-based CINNO Research, sales of China’s top 10 chip equipment manufacturers increased by 39% in the first half of 2023 compared to the same period last year.
“While I think the West has an advantage in the short term, China will do everything it can to avoid being left out of the chip race,” Futurum’s Newman said.
China has traditionally relied on foreign companies for critical components..
After the Dutch government revoked ASML’s export license, the Chinese government lost access to some of the world’s most advanced chip-making tools.
China is also banned from importing ASML’s extreme ultraviolet lithography equipment, which companies such as Taiwan’s TSMC need to make their smallest and most sophisticated chips.