Under the leadership of its president Joe Biden, the United States is implementing strict restrictions against China to hamper its supply of semiconductors. With this severe embargo, Washington wants to greatly hamper Beijing’s technological development.
Relations between the United States and China are deteriorating. In a context in which the embargo imposed on Huawei by Washington remains an important issue between the two superpowers, the administration of President Joe Biden has published a new round of strong restrictions. However, this time, it is not about specific companies being targeted, but about an entire country.
The new provisions aim to strengthen export controls on technology originating in the United States. And, among the announced measures, there is one that seeks to deny China access to certain semiconductors, regardless of their origin, as long as they contain US material.
The United States faces China
The objective is clear: delay the technological and military development of the Middle Kingdom. Note also that these restrictions come as Washington and Beijing are increasingly raising their voices around Taiwan. Mainland China wants to annex this US-allied island state. A war of dissenting influence that some fear will one day escalate into armed conflict.
Some new US restrictions apply now. The initiative is not new. As indicated in Reutersthe Biden administration had already sent letters earlier this year to major manufacturers asking them to stop shipments of equipment to 100% Chinese factories.
“Bring to China years ago”
The news agency even believes that this series of measures ” could be the biggest change in US policy on giving technology to China since the 1990sWith these restrictions, suppliers, including foreign ones, that use US equipment should no longer be able to supply some of the major Chinese factories, particularly those involved in chip design.
asked byReutersJim Lewis, a technology and cybersecurity expert at the Center for Strategic and International Studies, believes that “this will set china back years“.”China is not going to give up on chip manufacturing… but it will really slow it down.»
Taiwan (and TSMC) in the US field
For now, there is no indication whether other Western powers intend to apply the same type of restrictions against China. On the other hand, the Taiwanese government quickly showed that it was quite inclined to follow these new US rules against Beijing.
Beyond political, geographic, or even military issues, Taiwan occupies a central place in the semiconductor market. The island has several giants in the sector and specifically with the ogre TSMC that manufactures chips for many companies such as Apple, Qualcomm or Nvidia. This could have big repercussions.
For its part, the Chinese Ministry of Commerce has expressed its deep disagreement with Washington’s policy, which it considers dangerous for the health of supply chains around the world. “The United States must stop its actions immediately and provide a fair deal to companies around the world.»
Same story on the side of the Foreign Ministry that denounces abuses to reinforce “technological hegemony” from the United States. Remember that the US sanctions against Huawei have greatly weakened the latter in the smartphone market. In addition, the Chinese brand seems to have given up outside its native country.
At present, it is difficult to predict the magnitude of the impact of these measures. We do not know precisely what types of semiconductors are affected by this new embargo. A defense policy expert at the American Enterprise Institute, Éric Sayers, sums up the situation well. “The scope of the rules and the potential impacts are quite staggering, but of course the devil will be in the implementation details.»
Potentially every tech industry can be affected, from laptops to watches to connected TVs. We think of the countless smartphone manufacturers such as Xiaomi, Oppo or Vivo, but also of the electric car sector, where Chinese car brands are making a breakthrough.
Nor would it be impossible for this situation to aggravate the inflation that the technology market as a whole is experiencing. However, it is worth clarifying that several restrictions included in the new measures appear to be primarily aimed at harming the Chinese military by limiting its technological development.
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