US chip war could hurt the West as Beijing moves to ramp up its own industry
- Reference: 1669643323
- News link: https://www.theregister.co.uk/2022/11/28/beijing_ramping_up_semiconductors/
- Source link:
Washington's sweeping export restrictions on semiconductor technologies, [1]announced in October , were supposedly aimed at preventing the most advanced cutting-edge technologies from falling into the hands of China's military.
However, alongside US moves like the [2]CHIPS Act to boost its own semiconductor industries, it appears to reflect a wider concern that China may soon catch up and even overtake America in the technology stakes.
[3]
But according to a report in the Financial Times, cutting off access to Chinese technology will raise prices for businesses and consumers around the world, at a time when many are already facing the threat of rising inflation driving up prices.
[4]
[5]
A similar effect has already been seen in the telecoms industry, where countries such as the UK have stopped using [6]equipment supplied by China-based Huawei in the face of pressure from the US, a move which was believed to cause higher costs and would delay upgrades to 5G networks as alternative sources had to be found.
The new US export restrictions already appear to be hitting China, with the country's semiconductor imports [7]dropping 12.4 percent in September, as we reported last month.
[8]
According to the FT, the biggest issue facing China is likely to be the equipment needed to manufacture advanced semiconductors using the latest cutting-edge production nodes, typically those below 14nm but especially the newer nodes such as the 5nm and 3nm technology now coming online. The makers of most of this machinery, including companies such as Lam Research and Applied Materials, are based in the US and therefore banned from exporting kit to Chinese companies.
Other suppliers, such as Netherlands-based ASML, are not currently affected by the US export controls, but Washington is already applying pressure to change this. As we [9]reported earlier this month, it has been in talks with allies such as Japan and the Netherlands about imposing the same kind of export restrictions.
On Friday, Dutch trade minister Liesje Schreinemacher told Reuters that the nation is in talks with the US regarding the matter. ASML has already been prevented from selling its most advanced photolithography equipment to China under an existing arrangement, but the new US export restrictions go further.
[10]AI giant Baidu shrugs off US chip export restrictions as having 'little impact'
[11]UK forces Chinese-owned company to offload Newport Wafer Fab
[12]China conflicts prompt chip manufacturing battles in Europe
[13]Chipmakers cripple products to dodge US China ban
Meanwhile, just last week, the [14]US effectively banned the import or sale of Chinese telecoms and video surveillance products from Huawei, ZTE, Hytera Communications, Hikvision, and Dahua, on national security grounds.
China is already taking steps to ramp up its own semiconductor industry to become more self-sufficient and rely less on technology from elsewhere in the world, especially the US.
[15]
The South China Morning Post [16]reports that nine companies involved in the semiconductor supply chain have had their applications for an initial public offering (IPO) approved, which will allow them to raise money from investors to expand their operations and research efforts.
Among these businesses are several chip design outfits, a wafer foundry, and a chip packaging company. The SCMP quotes a senior Asia-Pacific economist as saying that China's research and development efforts in the semiconductor industry would be "a complicated and lengthy process, but it is important to counter US restrictions."
New figures from research outfit Gartner forecast that global semiconductor industry revenue is already expected to decline by 3.6 percent next year, nearly wiping out the 4 percent growth it has seen during 2022.
According to Gartner, semiconductor revenue in 2023 is now forecast to reach a total of $596 billion, down from an earlier forecast figure of $623 billion. This is largely due to rapid deterioration in the global economy and weakening consumer demand, said Practice Vice President Richard Gordon.
Particularly badly hit will be the memory chip market, which Gartner says will remain flat for the rest of 2022, but is forecast to decline 16.2 percent in revenue during 2023. ®
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[1] https://www.theregister.com/2022/10/07/biden_china_chips/
[2] https://www.theregister.com/2022/08/09/biden_signs_chips_act/
[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=2Y4TpKGOi4ULOgwxZS8vYCAAAAMo&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] 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=44Y4TpKGOi4ULOgwxZS8vYCAAAAMo&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] 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=33Y4TpKGOi4ULOgwxZS8vYCAAAAMo&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2022/10/13/uk_telcos_huawei_ban/
[7] https://www.theregister.com/2022/10/24/china_chip_imports_down_124/
[8] 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=44Y4TpKGOi4ULOgwxZS8vYCAAAAMo&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2022/11/02/us_allies_china_chip_sanctions/
[10] https://www.theregister.com/2022/11/24/us_chip_ban_baidu_impact/
[11] https://www.theregister.com/2022/11/17/uk_forces_newport_fab_sale/
[12] https://www.theregister.com/2022/11/08/china_at_heart_of_conflict/
[13] https://www.theregister.com/2022/11/08/chipmakers_alter_products_china_ban/
[14] https://www.theregister.com/2022/11/27/fcc_china_equipment_authorization_ban/
[15] 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=33Y4TpKGOi4ULOgwxZS8vYCAAAAMo&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[16] https://www.scmp.com/tech/tech-war/article/3201169/tech-war-fresh-funding-pipeline-enables-chinas-sanctions-hit-semiconductor-industry-cope-latest-us
[17] https://whitepapers.theregister.com/
The USA banned Japan from importing LCD screens so they made their own laptops. But who would ever dream of buying a Japanese laptop ?
Double Decker Bus
I was horrified when I recently watched a TV program about how an electric double decker bus was made. All the UK factory did was the "coachbuilding" work, based on a complete chassis, built in china, which was driven in to the factory under it's own power.
I'm certainly not saying that the coachbuilding work isn't worthwhile, but was deeply saddened that this is the way a bus is manufactured in the UK now.
Re: Double Decker Bus
It is often not possible to build e.g. chassis in the UK - we no longer have the expertise and manufacturing capacity or it will be too expensive.
Re: Double Decker Bus
I'm certainly not saying that the coachbuilding work isn't worthwhile, but was deeply saddened that this is the way a bus is manufactured in the UK now.
So, either you have never heard of "British Leyland", or you've forgotten too much.
Surprised?
Pretty much what some of us have been saying for some considerable time.
Blame the victim
If China wasn't embarking on increasingly more authoritarian path and imperialistic rhetoric threatening their neighbours with war, then maybe the West didn't have to move away from China.
Lessons have been (hopefully) learned that peace through trade is a pipe dream when you look at Russia. Bloodthirsty dictators will only use trade to build their war chest rather than make their subjects prosper.
It's also time that we brought these high tech jobs home. There many young folks who would love to work in the chip industry, but we don't have any and moving to China is not an option.
Don't buy it
I don't believe this will hurt the West in the long run. For us it's much more pressing to blunt China's progress both economically, politically and militarily. Yes, this could lead to higher prices, but that's more than worth it to keep us safe and relevant in the future.
May or may not hurt the west
The banks will be queuing up to invest anyway.
US bans China from participating in the International space station and now China is building their own and soon it will build a better space station because the US and it's allies have mismanaged and lagged behind in tech. Everything the US does to slow China does will lead to China building their own and surpassing the US.