Last week's US export controls could mark start of trade war
(2022/10/10)
- Reference: 1665409509
- News link: https://www.theregister.co.uk/2022/10/10/new_us_export_controls_could/
- Source link:
Analysis Nvidia believes it will not be affected by the latest US controls on technology, if only because it is already under similar restrictions. However, the effects on Chinese companies could be dramatic amid fears of a protracted trade war.
The sweeping new measures covering technology exports to China [1]announced on Friday appear to be the most wide-ranging so far, representing a new escalation in efforts by the US to contain China's growing semiconductor and compute capabilities.
Inevitably, the moves have angered the Chinese government, which has responded with accusations that the US is unfairly targeting its technology industries in an attempt to stifle competition. Others went further, and argued that the new measures mean that the US and China are now officially involved in an [2]economic war that will impact global trade.
[3]
According to [4]Bloomberg , stocks in semiconductor companies were down following the news, and this was affecting businesses around the globe. These included US companies like Nvidia, Netherlands-based ASML, one of the key suppliers of equipment for chip manufacturing, as well as Chinese outfits such as chipmaker Semiconductor Manufacturing International Corporation (SMIC).
[5]
[6]
Nvidia, however, said it did not expect the new export control rules to have a material impact on its business, despite the fact that some of these explicitly target chips and technology for AI and high performance computing (HPC), which is where many of Nvidia's GPU products sit.
The company told [7]Reuters that it had already been made subject to rules that could impact $400 million of its sales in China for its current fiscal quarter. These rules, which were [8]announced at the start of September , effectively banned both AMD and Nvidia from selling some key products to China, including Nvidia's A100 Tensor Core GPU and the upcoming H100, so perhaps means that any negative impact has already been factored in for these two vendors.
[9]
The latest US export controls put a block on the shipment to China of all chips for AI and HPC without an export licence, which will likely be very difficult to obtain, as well as blocking sales of equipment that could be used to manufacture such products.
Additionally, they also put a block on equipment that could be used to make logic chips with a 16nm production process or anything more advanced, as well as DRAM at 18nm or more advanced, and NAND flash with greater than 128 layers.
Who's down with HPC? Well you know... me
The American government also expanded its Unverified List, which contains companies that are barred from being allowed to import US technology, and reportedly made it easier to migrate organizations from this list to the more severe Entity List.
In effect, the US is trying to prevent Chinese companies from not only having access to the latest high-performance chips and technology, but from having the ability to manufacture comparable technology itself – at least until it can develop the native means to do so, and this could be a long, slow process.
According to the FT, these new measures are similar to those sanctions the US has [10]deployed against Huawei over the previous two or three years, meaning that the American government is using what it has learned in a broader attack against China's technology industry.
[11]
The effect on Huawei has been dramatic, with the CEO reportedly [12]putting the organization in survival mode a few months ago, blaming US sanctions as well as the worsening economic situation for the company's woes.
[13]South Korea relieved US China chip ban won't bite, as Beijing fumes
[14]Biden cuts off China's Yangtze, 30 others from US chipmaking gear
[15]More chipmakers report falling revenue as market braces for tough year
[16]China upgrades Great Firewall to defeat censor-beating TLS tools
Huawei has been seeking alternative sources for chips, and it was understood that a startup called Pengxin Micro Integrated Circuit Manufacturing Co has been set up in China by a former Huawei executive to meet this need. It is not clear whether the new company will fall foul of the new US regulations, but it is believed to be trying to obtain chipmaking equipment from foreign suppliers to enable it to start production in 2025.
However, even before the latest measures were announced, some voices were warning that American sanctions will likely harm other markets, including US companies. Fortune magazine said that losing access to the Chinese market will hurt the revenues of US semiconductor companies, which could hinder their ability to fund research and development for future technologies.
Export controls might also lead to China imposing sanctions of its own against US semiconductor companies, and this could open up into a broader trade war that may hit the entire global economy, while simply spurring China to pour resources into developing its own advanced semiconductor manufacturing processes that the US will have no control over. ®
Get our [17]Tech Resources
[1] https://www.theregister.com/2022/10/07/biden_china_chips/
[2] https://semianalysis.substack.com/p/china-and-usa-are-officially-at-economic
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y0RBlqw-CtkjJrrap7bzyQAAANg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.bloomberg.com/news/articles/2022-10-07/white-house-announces-new-restrictions-on-chip-exports-to-china
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y0RBlqw-CtkjJrrap7bzyQAAANg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y0RBlqw-CtkjJrrap7bzyQAAANg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.reuters.com/technology/nvidia-says-it-does-not-expect-new-us-export-hit-its-business-2022-10-07/
[8] https://www.theregister.com/2022/09/01/us_stops_nvidia_and_amd/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y0RBlqw-CtkjJrrap7bzyQAAANg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2020/05/16/huawei_chip_ban_latest/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y0RBlqw-CtkjJrrap7bzyQAAANg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://www.theregister.com/2022/08/24/huawei_ceo_warning/
[13] https://www.theregister.com/2022/10/10/china_fumes_over_us_chip_ban/
[14] https://www.theregister.com/2022/10/07/biden_china_chips/
[15] https://www.theregister.com/2022/10/07/chipmaker_falling_revenue/
[16] https://www.theregister.com/2022/10/06/great_firewall_of_china_upgrades/
[17] https://whitepapers.theregister.com/
The sweeping new measures covering technology exports to China [1]announced on Friday appear to be the most wide-ranging so far, representing a new escalation in efforts by the US to contain China's growing semiconductor and compute capabilities.
Inevitably, the moves have angered the Chinese government, which has responded with accusations that the US is unfairly targeting its technology industries in an attempt to stifle competition. Others went further, and argued that the new measures mean that the US and China are now officially involved in an [2]economic war that will impact global trade.
[3]
According to [4]Bloomberg , stocks in semiconductor companies were down following the news, and this was affecting businesses around the globe. These included US companies like Nvidia, Netherlands-based ASML, one of the key suppliers of equipment for chip manufacturing, as well as Chinese outfits such as chipmaker Semiconductor Manufacturing International Corporation (SMIC).
[5]
[6]
Nvidia, however, said it did not expect the new export control rules to have a material impact on its business, despite the fact that some of these explicitly target chips and technology for AI and high performance computing (HPC), which is where many of Nvidia's GPU products sit.
The company told [7]Reuters that it had already been made subject to rules that could impact $400 million of its sales in China for its current fiscal quarter. These rules, which were [8]announced at the start of September , effectively banned both AMD and Nvidia from selling some key products to China, including Nvidia's A100 Tensor Core GPU and the upcoming H100, so perhaps means that any negative impact has already been factored in for these two vendors.
[9]
The latest US export controls put a block on the shipment to China of all chips for AI and HPC without an export licence, which will likely be very difficult to obtain, as well as blocking sales of equipment that could be used to manufacture such products.
Additionally, they also put a block on equipment that could be used to make logic chips with a 16nm production process or anything more advanced, as well as DRAM at 18nm or more advanced, and NAND flash with greater than 128 layers.
Who's down with HPC? Well you know... me
The American government also expanded its Unverified List, which contains companies that are barred from being allowed to import US technology, and reportedly made it easier to migrate organizations from this list to the more severe Entity List.
In effect, the US is trying to prevent Chinese companies from not only having access to the latest high-performance chips and technology, but from having the ability to manufacture comparable technology itself – at least until it can develop the native means to do so, and this could be a long, slow process.
According to the FT, these new measures are similar to those sanctions the US has [10]deployed against Huawei over the previous two or three years, meaning that the American government is using what it has learned in a broader attack against China's technology industry.
[11]
The effect on Huawei has been dramatic, with the CEO reportedly [12]putting the organization in survival mode a few months ago, blaming US sanctions as well as the worsening economic situation for the company's woes.
[13]South Korea relieved US China chip ban won't bite, as Beijing fumes
[14]Biden cuts off China's Yangtze, 30 others from US chipmaking gear
[15]More chipmakers report falling revenue as market braces for tough year
[16]China upgrades Great Firewall to defeat censor-beating TLS tools
Huawei has been seeking alternative sources for chips, and it was understood that a startup called Pengxin Micro Integrated Circuit Manufacturing Co has been set up in China by a former Huawei executive to meet this need. It is not clear whether the new company will fall foul of the new US regulations, but it is believed to be trying to obtain chipmaking equipment from foreign suppliers to enable it to start production in 2025.
However, even before the latest measures were announced, some voices were warning that American sanctions will likely harm other markets, including US companies. Fortune magazine said that losing access to the Chinese market will hurt the revenues of US semiconductor companies, which could hinder their ability to fund research and development for future technologies.
Export controls might also lead to China imposing sanctions of its own against US semiconductor companies, and this could open up into a broader trade war that may hit the entire global economy, while simply spurring China to pour resources into developing its own advanced semiconductor manufacturing processes that the US will have no control over. ®
Get our [17]Tech Resources
[1] https://www.theregister.com/2022/10/07/biden_china_chips/
[2] https://semianalysis.substack.com/p/china-and-usa-are-officially-at-economic
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y0RBlqw-CtkjJrrap7bzyQAAANg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.bloomberg.com/news/articles/2022-10-07/white-house-announces-new-restrictions-on-chip-exports-to-china
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y0RBlqw-CtkjJrrap7bzyQAAANg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y0RBlqw-CtkjJrrap7bzyQAAANg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.reuters.com/technology/nvidia-says-it-does-not-expect-new-us-export-hit-its-business-2022-10-07/
[8] https://www.theregister.com/2022/09/01/us_stops_nvidia_and_amd/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y0RBlqw-CtkjJrrap7bzyQAAANg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2020/05/16/huawei_chip_ban_latest/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y0RBlqw-CtkjJrrap7bzyQAAANg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://www.theregister.com/2022/08/24/huawei_ceo_warning/
[13] https://www.theregister.com/2022/10/10/china_fumes_over_us_chip_ban/
[14] https://www.theregister.com/2022/10/07/biden_china_chips/
[15] https://www.theregister.com/2022/10/07/chipmaker_falling_revenue/
[16] https://www.theregister.com/2022/10/06/great_firewall_of_china_upgrades/
[17] https://whitepapers.theregister.com/
What a surprise
Duncan Macdonald
The US is trying to cripple other countries to give its own inefficient companies an advantage.
Not content with there being one potential source of world conflict (Putin) the US is doing its best to create another.
The trade war is just the start
There have been a couple of hundred or so empires throughout history. It's a useful statistic to know, because all of them came to an end sooner or later. While past history is no prediction for the future, if 200 empires have collapsed, it is not unlikely that number 201 will do the same. No doubt each one thought it was unique. This is the same conceit that America has when it uses the word "exceptionalism" to describe itself.
We are in the latter stages of the American empire. The American empire was already building before WW2 and expanded very rapidly afterwards. The USA is now trying to prevent a competitor from rising. It has tried arguing, it has tried propaganda (the CIA has a program to insert pro-American stories in the "free" press throughout the world), it has tried restricting trade, it has tried sanctions. We know what comes next. It is trying to sow discord in China's neighbours.
But the USA will collapse by itself. It doesn't need a peer competitor. The thing that will destroy the USA is debt. Some lunatics think they can print money forever, that the economy will only grow, that the American "exceptionalism" will always prevail. Sooner or later the bill comes in. The party will come to an end and there will be a huge headache.
The sanctions that the USA already has in place against whoever it feels like, and so called secondary sanctions (AKA threats), have directly harmed other so-called allied countries' economies. We know what it is like to be in the American camp. Many countries, friendly towards the USA, are not following these sanctions with glee as it is harms them. These countries have no particular quarrel with America's "enemies".
The USA will not go down without a fight, and it will fight dirty. But it will go down like the other empires. It will remain powerful but not what it once was.