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New US sanctions on microchips will deal another blow to China's self-sufficiency effort.

New US sanctions on microchips will deal another blow to China's self-sufficiency effort.

 


China's semiconductor industry braces for further shocks as the United States prepares to add several major mainland chip equipment and materials suppliers to its list of trade restrictions, dealing another blow to the country's efforts in favor of technological autonomy, according to two close sources. with the case.

Several chip plants and manufacturing partners of Huawei Technologies, which has been under U.S. sanctions since 2019, will be among nearly 200 Chinese companies included in updated export controls to be announced later this week or early next week, the sources said.

Washington's move is also expected to affect venture capital firms with close ties to China's semiconductor sector, as well as upstream companies such as specialty gas suppliers, according to one of the people briefed on the situation. , but who declined to be named due to the sensitivity of the subject.

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The U.S. Commerce Department's Bureau of Industry and Security declined to comment Wednesday. Chinese Foreign Ministry spokeswoman Mao Ning condemned the planned US trade restrictions and said Beijing would take resolute measures to defend the continent's trade interests.

Several of Huawei's manufacturing partners are expected to be added to updated U.S. export controls. Photo: Reuters alt=Several of Huawei's industrial partners are expected to be added to updated US export controls. Photo: Reuters>

The new sanctions are expected to mark a major escalation in the US-China technology rivalry since October 2023, when the Biden administration tightened its export restrictions introduced in 2022 targeting the continent's semiconductor industry , citing fears that advanced technologies could be used to strengthen Beijing's military. abilities.

Last year's update primarily aimed to slow the development of artificial intelligence (AI) in China by limiting the country's access to advanced AI chips from Nvidia and lithography systems from Dutch supplier ASML, world leader.

One of the sources said the impact on China's chip industry would be significant if major suppliers were blacklisted by the United States.

The mainland is striving to achieve self-sufficiency in its semiconductor supply chain to counter U.S. sanctions. But even though the country has developed domestic alternatives for some less advanced chipmaking equipment, it remains heavily dependent on imported high-end tools such as lithography systems and electron beam inspection systems.

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China's strength lies primarily in film etching and depositing, with domestic companies like Naura Technology Group and Advanced Micro-Fabrication Equipment seeing growing demand in recent years.

As new U.S. sanctions loom, China's Vice Minister of Commerce and top trade negotiator Wang Shouwen met with the head of Nvidia's global business operations on Monday, touting the “broader opportunities” a more open China could offer to foreign companies.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative news source on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP Facebook and Twitter pages. Copyright 2024 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.

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