• Tue. Jan 31st, 2023

Companies Assess the Impact of the US Ban on Sending Chip Technology to China

Oct 21, 2022

The Biden administration’s advertisement before this month that it would ban the transfer of advancedU.S. semiconductor technology to China continues to resonate through global requests. The ruling by the Department of Commerce affects not onlyU.S. enterprises that vend to China but any company whose products contain American semiconductor technology.

In landmass China, according to Bloomberg News, officers from the Ministry of Industry and Information Technology have been summoning directors from domestic semiconductor manufacturers to assess how being deprived of high- tech manufacturing tools from overseas would impact their businesses. And companies that calculate on significances of high- end semiconductors are assessing the viability of their businesses going forward.

In the U.S., semiconductor companies and other tech enterprises that count China among their largest single requests are facing potentially severe damage to their earnings. Other companies that manufacture tech products in China are having to recall U.S. workers because the ban also bars “U.S.

Internationally, large chipmakers, similar as Taiwan Semiconductor Manufacturing Company and South Korea’s Samsung, as well as Netherlands- grounded ASML, which makes chip manufacturing outfit, are reassessing their business with China as they explore how deeply the new rules will cut into their deals.

” It really is reshaping the request,” said James Lewis, elderly vice chairman and director of the Strategic Technologies Program at the Center for Strategic and International Studies.” The Koreans, the Taiwanese and some American companies are really nervous about it. I mean, everyone’s asking,’ What can I still vend to China?’ And in some cases, the answer is’ nothing,'” he told VOA.

Targeting China’s military

The Biden administration has characterized the ban as a public security measure, saying that withholding largely sophisticated semiconductors from China will hinder the development of Chinese munitions and surveillance technology.

The trouble is that the same technology that goes into Chinese munitions systems is also necessary for other goods, including electric vehicles, an area in which China is significantly farther advanced than theU.S.

It remains unclear precisely howU.S. authorities will apply the ban. It primarily targets the most advanced chip technology available, meaning that” mature” chip technology — aged and lower sophisticated chips — won’t be affected.

Where theU.S. draws that line, still, could determine whether Chinese businesses similar as smartphone manufacturers and marketable aerospace companies are left alone or devastated.

‘ Cold war’ tactic

Experts and pundits saw the duty of the tough new ban as a dramatic escalation of the Biden administration’s sweats to keep China from being suitable to advance toward technological equality with theU.S.

Writing for the American news publication Foreign Policy, Edward Alden, a elderly fellow at the Council on Foreign Relations, said the move” looks decreasingly drawn from the Cold War playbook.” He also noted that” the new restrictions, which will be completely enforced as soon as Oct. 21, go well beyond any former measures by seeking to indurate China at a backward state of semiconductor development and cut Chinese companies off from U.S. assiduity moxie.”

In the Financial Times, U.S. public editor and columnist Edward Luce wrote that” Joe Biden this month launched a full-bloated profitable war on China.” U.S. foreign policy that assumed China’s global integration would constrain its rise as a great power,” he added.

China reacts

Speaking at the launch of the Chinese Communist Party’s five- time congress Sunday, during which he’s anticipated to be named to an extraordinary third term as party leader, Xi Jinping didn’t address the ban directly. still, he did promise to step up investment in areas that would help his country achieve” technology tone- reliance.”

” China will move briskly to launch a number of major public systems that are of strategic, big- picture and long- term significance,” Xi said.

In a statement handed to VOA by the Chinese delegacy in theU.S., prophet Liu Pengyu said that he wasn’t apprehensive of any specific meetings being held in China.

” I would like to note that what theU.S. is doing is purely’ sci- tech ascendance .’ It seeks to use its technological prowess as an advantage to hobble and suppress the development of arising requests and developing countries,” Liu said.” TheU.S. presumably hopes that China and the rest of the developing world will ever stay at the lower end of the artificial chain. This will disrupt the global force chain and artificial chain, and the final result will hurt itself and others likewise.”

Assiduity concerned

Semiconductor companies have replied precisely to the Biden administration’s decision. Although they’re admitting the government’s enterprises, they’re motioning frustration that they were neither given clear guidance about how the ban will be applied nor given an occasion to consult with the Commerce Department before it was put into place.

In a statement handed to VOA, SEMI, a trade group representing the semiconductor assiduity, said that its members understand the United States’ public security enterprises. In addition, it said,” We’re presently assessing the implicit goods of the Commerce Department’s unilateral controls on the semiconductor assiduity in theU.S. and abroad. We plan to give feedback to the government on these rules, as they weren’t preliminarily published for public comment.”

” We believe it’s vitally important that theU.S. government implements these rules in close collaboration with and input from our crucial transnational mates in order to limit unintended adverse consequences that could resonate through the domestic force chain of this critical assiduity.”