Prof. ST Hsieh
Director, US-China Energy Industry Forum
626-376-7460
July 1, 2023
The US has successfully initiated the full-scale chip war against China. But the implication is much broader than the US vs China, because Dutch’s ASML has followed the US policy against China. It amounts to the US unilaterally re-write global trade rules.
The chip war signals that globalization is officially dead, and previously established rules, balance, and harmony have been disrupted. This shift is predicted to greatly impact the supply chain, industry practices, and business models. Further, key aspects of globalization such as competition, innovation, and the free movement of talent and resources will be greatly affected. The overall impact will be a tremendous and profound impact on the global supply chain and industry practices.
It is clear that the US is sincerely committed to “contain” China, despite the continued official proclamations by the US administration officials from Biden down that the US were only interested in fair and rule-based competitions with China. The prospect of a US-China détente is very dark.
RPT-TIMELINE-US targets China over semiconductors
Thu, June 29, 2023 at 9:34 PM PDT
June 30 (Reuters) – U.S.-China tensions over semiconductors began with the Trump administration’s trade war and have ratcheted up under President Joe Biden’s leadership as Washington looks to undercut Beijing’s efforts to build its high-tech industry.
The U.S. and the Netherlands are set to deliver a one-two punch to China’s chipmakers by further curbing sales of chipmaking equipment, including some from Dutch firm ASML , the global leader in the critical process of lithography, Reuters reported on Thursday.
Here is a timeline of U.S. actions against China’s chip industry:
October 2018: Former U.S. President Donald Trump’s administration cuts off Chinese chipmaker Fujian Jinhua Integrated Circuit from its U.S. suppliers after the U.S. Justice Department indicted the state-backed firm for stealing trade secrets.
January 2020: Reuters reported that the Trump administration had since 2018 had mounted an extensive campaign to block the sale of Dutch chip manufacturing technology to China. It resulted in ASML being unable to sell its most advanced lithography machine to a Chinese customer.
May 2020: The Trump administration blocks shipments of semiconductors to China’s Huawei Technologies from global chipmakers, crippling its HiSilicon chip and smartphone divisions.
December 2020: The U.S. adds China’s top chipmaker SMIC and dozens of other Chinese firms to a trade blacklist and said it would presumptively deny licenses to prevent SMIC from acquiring technology to produce semiconductors at advanced technology levels of 10 nanometres or below.
September 2022: U.S. chip designers Nvidia and Advanced Micron Devices say U.S. officials have told them to stop exporting some top computing chips for artificial intelligence work to China.
October 2022: The Biden administration publishes a sweeping set of export controls, including a measure to cut China off from certain semiconductor chips made anywhere in the world with U.S. equipment.
December 2022: The U.S. adds Chinese memory chip maker YMTC and dozens of other Chinese firms to its trade blacklist.
June 29, 2023: Reuters reports the Netherlands is this summer planning to curb sales of certain ASML equipment from being sold to China’s chipmakers. The U.S. is expected to go one step further and use its long reach to withhold even more Dutch equipment from specific Chinese fabrication plants.
China’s semiconductor ambitions dealt fresh blow by new Dutch export rules on ASML chip-making machines
Sat, July 1, 2023 at 2:30 AM PDT
The Netherlands government just dealt a fresh blow to China’s semiconductor industry with further restrictions on shipments of ASML’s chip-making equipment to the country, but it may not be the last word as the US is reportedly seeking to further tighten the choke hold on China’s chip ambitions.
ASML said in a statement on Friday that effective September 1, it will be required to apply for a license from The Hague to ship its most advanced immersion deep ultraviolet (DUV) lithography systems, including the TWINSCAN NXT: 2000i, and more sophisticated models.
In response, the Chinese government condemned the US for “coercing” other countries into imposing technological blockades on China and “undermining market rules and international trade” as well as the stability of the global supply chain.
The latest ban did not come as a complete surprise, as the company as early as March had warned that it may be subject to broader export restrictions on advanced chip-making equipment, but it showed that Beijing’s diplomatic efforts with The Hague had fallen on deaf ears.
Although it seems the latest Dutch export controls have left room for Chinese companies to use ASML’s lower-end equipment, that might change under further pressure from the US.
With tighter US restrictions looming, some chip-making experts declared that “globalisation is dead” at the Semicon China conference in Shanghai on Thursday.
However, some are hopeful China can find a different path forward.
Han Di, senior vice-president of Semiconductor Manufacturing International Corp, China’s largest wafer foundry, said the country must find new ways to embed itself in cross-border supply chains.