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China chip imports down 12.4% as tech trade war with US intensifies

(2022/10/24)


The chip wars appear to be biting in China, as the country’s semiconductor imports dropped 12.4 percent in the month of September, according to official customs data published by the country.

China’s semiconductor imports stood at 47.6 billion chips last month, compared with 54.3 billion chips for the same period last year, according official figures released this week. This also contrasts with the first nine months of 2021, when imports reportedly increased 23.7 per cent.

US sanctions against China have been ongoing for some time before the [1]latest export controls were announced this month , which chiefly targeted China’s ability to make its own chips by importing chip design and manufacturing tools. However, tensions between the two countries along with the chip shortages following the pandemic caused many companies in China to stockpile supplies during 2021.

[2]

The figures released by China’s [3]National Bureau of Statistics also showed that the country’s own domestic chip output dropped 16.4 per cent during September, to 26.1 billion units.

[4]Intel sued over historic DEC chip site's future

[5]China dumps dud chips on Russia, Moscow media moans

[6]China doesn't need to take Taiwan's fabs to escape US trade bans

[7]SK hynix, Samsung, TSMC granted one-year reprieve from China chip restrictions

Meanwhile, the US is already considering implementing additional export controls, this time focused on limiting China’s access to technology around quantum computing and artificial intelligence software, according to the [8]South China Morning Post , which quotes “people familiar with the situation”.

US officials are said to be still determining how best to frame the controls concerning quantum computing, which will likely focus on technology to control error rates. While quantum is still at an embryonic stage, it seems that America hopes to stop China from getting ahead in the race to exploit it, given its potential to boost some complex computational tasks.

[9]

[10]

The US government has already put restrictions on sales to China of [11]hardware from AMD and Nvidia that might be used in AI and supercomputing, comprising the latest GPU accelerator products from the two companies.

In a further blow to China, Taiwanese chipmaking giant TSMC has apparently suspended production of silicon for Chinese startup [12]Biren , designer of the country’s native GPU technology, because of US restrictions. According to Bloomberg, TSMC is said to be unsure whether Biren’s products fall under the rules for restrictions, but has ceased production anyway in order to ensure it is in compliance with US regulations.

[13]

Chinese chipmaker Yangtze Memory Technologies Corp (YMTC) is also asking any employees in key technical positions that are US passport holders to leave the company, in order to comply with the latest sanctions from The Whitehouse, the [14]FT reports . The new rules require any US citizen or entity to seek permission from the Department of Commerce for any involvement in the development or manufacture of chips in China.

YMTC was already among the companies [15]hit by the new controls which have restricted sales of chipmaking equipment to China.

The FT notes that China will struggle to maintain its rapid expansion in artificial intelligence and supercomputing without access to US technology, but the sanctions may ultimately prove futile in the very long term, since they will only drive Beijing to double-down on developing its own native technologies that the US has no control over. ®

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[1] https://www.theregister.com/2022/10/07/biden_china_chips/

[2] 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=2Y1cK@PgGlNdi3l@eguQMbwAAABc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

[3] http://www.stats.gov.cn/english/

[4] https://www.theregister.com/2022/10/19/intel_massachusetts_dec/

[5] https://www.theregister.com/2022/10/18/russia_china_semiconductro_failure_rates/

[6] https://www.theregister.com/2022/10/13/china_doesnt_need_to_take/

[7] https://www.theregister.com/2022/10/13/sk_hynix_china_chip_reprieve/

[8] https://www.scmp.com/tech/policy/article/3196729/us-weighs-more-china-tech-restrictions-targeting-quantum-computing-and-artificial-intelligence

[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=44Y1cK@PgGlNdi3l@eguQMbwAAABc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[10] 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=33Y1cK@PgGlNdi3l@eguQMbwAAABc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0

[11] https://www.theregister.com/2022/09/01/us_stops_nvidia_and_amd/

[12] https://www.nextplatform.com/2022/08/25/china-launches-the-inevitable-indigenous-gpu/

[13] 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=44Y1cK@PgGlNdi3l@eguQMbwAAABc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[14] https://www.ft.com/content/97147102-a02c-48df-b3a0-28c77c4c298f

[15] https://www.theregister.com/2022/10/07/biden_china_chips/

[16] https://whitepapers.theregister.com/



Withdraw

StrangerHereMyself

I believe China will soon withdraw from the world stage to become a hermit kingdom once again. In a hundred years when they open up again, we'll find that they're still using tech from 2022, like an evolved version of RISC-V or Linux. The rest of the world will have moved on.

The same thing happened with Chinese 9 man volleyball, which is actually how the sport was originally created by its American inventor in the late 19th century.

Re: Withdraw

Yet Another Anonymous coward

Which is ironically bad for everyone.

If the USA had been cut off from the civilised world in the 1800s, to prevent it stealing industrial technology from Europe, then perhaps Britain would have been a bigger empire for longer and the USA would be just the world's cotton plantation.

But we would be living in world without a lot of the 20th century's inventions. It would be a cool steampunk future though !

Re: ...."to prevent it stealing industrial technology from Europe,,,,,,"

Arctic fox

Indeed. The US spent most of the nineteenth century stealing patents and copywright (for example the simply stole everything that Charles Dickens and George Bernard Shaw wrote publishing it without paying the authors a penny and the patent rights they stole were continental scale larceny). It was only when Edison started to come up with some serious innovations/inventions that the US suddenly discovered the joys of IP proctection. Whilst some of the measures they are taking regarding China are based on genuine security concerns a great deal of it is a thinly disguised and very hypocritical trade war.

Re: Withdraw

martinusher

Its a matter of perspective. They're actually bigger than us and they have more resources. They also make most of the products the world uses. So it could turn out that we become the 'hermit kingdom'.

Exerting secondary control like we do in the US not only requires a large enforcement bureaucracy but also makes our products less attractive. We've enjoyed a significant lead in these products but this lead is being chipped away and once it becomes unimportant then there's no need for a customer to buy and encumbered product when there's a usable free alternative.

I wouldn't worry about 'tech from 2022'. We're still stuck on x86 which is effectively 'tech from 1974' (or 1984 if you want to be a bit kinder). There's nothing wrong with RISC-V, it does the job its intended to do (...and it does it better than ARM....). Its other, potentially completely different, architectures that may diverge. Here who's to say that 'ours' is automatically better than 'theirs'? (Also, 'ix' OS's have stood the test of time because they do the job they're intended to do.....unlike a certain dog's breakfast of code that we call an 'operating system' that's widely used in our society. Again, Linux does the job. Other completely different systems might evolve.....but they most definitely won't be Windows based!)

Re: Withdraw

Craig 2

"...they have more resources. They also make most of the products"

The key word you're missing there is "cheaper". The have cheaper resources and make cheaper products than can be mined / built in other parts of the world. (Mainly due to cheap labour and lax regulations) If China shut up shop tomorrow we would be paying more for everything but there's nothing at all that couldn't be replaced.

Re: Withdraw

martinusher

No, they've passed that phase of being the ultra-cheap workshop of the world. They've been investing heavily in education and infrastructure and they're now at the point where a lot of the global R&D is partly or totally done in China.

We've been able to avoid facing the inevitable by just saying to ourselves that "they steal all our IP" and "they can't invent anything, they just copy". We used to say exactly the same thing about the Japanese right up to the point where they took down our consumer electronics market and put a huge dent in our car market. The Chinese are major global players and need to be regarded as such; if we ignore them they'll just carry on anyway and since they're constantly establishing friendly relations with nominally non-aligned countries their influence extends far past their borders.

>but there's nothing at all that couldn't be replaced.

Eventually, and at what cost? I don't see Sheffield or Birmingham becoming manufacturing centers. There's no capital (its too impatient, anyway) and the overheads and startup costs are too high.

Anonymous Coward

Prohibiting the sales of advanced products is easy for the US government to do because all it requires is legal power and no investment. Exporters bear the short term cost.

On the other hand, building alternate supply chains, however many laws and and speeches are made, is really, really hard.

Recently dumb slow Iranian drones have decimated Ukrainian power infrastructure in a few short weeks, the most advanced component being off-the-shelf GPS chips manufactured in China. Now imagine what China could do with modified cheap commercial drones manufactured by the tens or hundreds of thousands.

In contrast, there are no real battle ready AI weapons so far - the practical uses are so far mostly about domestic control and China is already the leading user in that field.

Xi is testing out his war time domestic control - simulated with COVID lockdowns - to make sure the state is battle ready. He'll keep his center of mass low when push comes to shove, relying on low end good enough weapons in enormous quantities. China is already food self sufficient, and Russian hydrocarbons ensure a supply of fertilizer and fuel.

There is a long and difficult road ahead for the West, big painful changes. It is a mistake to think of these sanctions as a victorious offensive - actually it is a rushed defensive retreat - like blowing up bridges - as the first step in a very long and painful struggle.

We have art that we do not die of the truth.
-- Nietzsche