China's semiconductor threat

Extracted Attributes

• Nature

  Geopolitical risk

• Primary Target

  Nvidia's market dominance

• China's Vulnerability

  Heavy dependence on foreign chips and related technologies (from Japan, Netherlands, South Korea, Taiwan, United States)

• China's Strategic Goal

  Indigenous and self-sufficient semiconductor ecosystem; self-reliance in logic chip production

• Associated Technologies

  Advanced computing, semiconductor manufacturing, artificial intelligence

• China's Alleged Tactics

  Systematic semiconductor technology theft, forced technology transfers, antimonopoly investigations, industrial espionage

• China's Countermeasures

  Export bans on gallium, antimony, and germanium

• China's Underlying Motivation

  National security, military modernization, weapons of mass destruction (WMD) development, Military-Civil Fusion strategy

• SMIC's Lag Behind Global Leaders

  Approximately five years (e.g., TSMC)

• China's Strength in Chip Production

  Mature-node chips (28 nanometres and above)

• China's Leading Competitor (Logic Chips)

  Semiconductor Manufacturing International Corporation (SMIC)

Timeline

• United States implements export controls on ZTE. (Source: web_search_results)

  2018

• United States implements export controls on Huawei. (Source: web_search_results)

  2019

• United States implements new export controls targeting China's access to advanced computing and semiconductor manufacturing items, citing national security concerns. (Source: wikipedia)

  2022-10-07

United States New Export Controls on Advanced Computing and Semiconductors to China

Effective October 7, 2022, the United States of America implemented new export controls targeting the People's Republic of China's (PRC) ability to access and develop advanced computing and semiconductor manufacturing items. The new export controls reflect the United States' ambition to counter the accelerating advancement of China's high-tech capabilities in these spaces to address its foreign policy and national security concerns.

Web Search Results

• Commerce Strengthens Export Controls to Restrict China's ...

  PRC leadership at the highest levels has stressed the importance of building an indigenous and self-sufficient semiconductor ecosystem, referring to ICs as critical to national security and military capabilities. The Chinese Communist Party’s semiconductor strategy intends to further the PRC’s military modernization, weapons of mass destruction (WMD) development, and control agenda to promote transnational regression and stifle human rights, threatens the security and undermines the values of [...] “The PRC’s Military-Civil Fusion strategy presents a significant risk that advanced node semiconductors will be used in military applications that threaten the security of the United States, as well as the security of our allies and partners,” saidAssistant Secretary of Commerce for Export Administration Thea D. Rozman Kendler. “These rules build on previous actions taken in service of our longstanding goal: protecting our collective security by constraining the PRC’s ability to indigenize the [...] Washington, D.C. – Today, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced a package of rules designed to further impair the People’s Republic of China’s (PRC) capability to produce advanced-node semiconductors that can be used in the next generation of advanced weapon systems and in artificial intelligence (AI) and advanced computing, which have significant military applications. This action is a proactive measure enhancing the Department of Commerce’s work to

• What's happening in China's semiconductor industry?

  Despite being the ‘world’s factory’ in other industries, China remains heavily dependent on foreign chips and related technologies, particularly from Japan, the Netherlands, South Korea, Taiwan and the United States. This dependency has been framed as a strategic vulnerability, with the Chinese central state warning that reliance on foreign core technologies could leave China ‘stuck in the neck’ or strangled (Ding, 2024). [...] The late 2010s saw a turning point with the China-US trade war escalating into a ‘tech war’ over semiconductors. US export controls, starting with telecoms companies ZTE (in 2018) and Huawei (in 2019), not only disrupted corporate operations, but also exposed China’s vulnerabilities and dependence on foreign semiconductor technologies, particularly in the most advanced stages of chip design and fabrication. [...] China’s relations with key semiconductor powers shape the global industry’s integration. The China-US rivalry has led to partial decoupling, with export controls restricting China’s access to advanced chips, while American firms like Qualcomm and Applied Materials earn significant revenue in China. Taiwan, via TSMC, remains a critical node, producing 90% of the world’s most advanced chips. But geopolitical risks could disrupt supply chains, potentially destabilising the global economy.

• China's Quest for Semiconductor Self-Sufficiency

  Although China may not achieve full autonomy, its progress towards self-reliance in logic chip production is likely to have a significant impact on global semiconductor supply chains. It could fundamentally disrupt market dynamics: increased capacity in mature-node chips would raise the spectre of oversupply and significant price pressures, damaging the competitiveness of UK firms in the global market.( Moreover, many of China’s domestic semiconductor industry priorities overlap with areas that [...] operating in China have received extensive support from the Chinese Government while contending with systematic semiconductor technology theft, forced technology transfers, antimonopoly investigations and various forms of industrial espionage.( [...] 4. Mature-node vulnerabilities. China’s strength in mature-node chips – those produced at 28 nanometres (nm) and above – is well-recognised, augmented by rapidly expanding markets for electric-vehicle batteries and solar cells. Members of the G7 (and other like-minded countries) have expressed concern that this could lead to oversupply in the global market and the dumping of certain chips that drives prices down – tempting UK and Korean companies to become reliant on them. This could leave

• Everything You Need to Know About the U.S. Semiconductor ...

  One of the most significant steps taken by China is imposing export bans on gallium, antimony, and germanium. These rare elements are indispensable for advanced semiconductor manufacturing and other high-tech applications. By restricting their export, China aims to disrupt global supply chains and exert pressure on nations that rely on these materials. The immediate effect has been a surge in global prices, which is prompting semiconductor firms to seek alternative suppliers and invest in [...] The semiconductor industry has become a battleground for a high-stakes geopolitical rivalry between the United States and China. In a move to curb China’s technological advancements and safeguard national security, the U.S. recently announced expanded restrictions on the export of advanced semiconductor technologies to Chinese firms. These measures target critical components, equipment, and software used in producing cutting-edge chips. [...] China has responded assertively to the U.S. semiconductor restrictions by leveraging regulatory, economic, and strategic measures to counter the impact and bolster its technological ambitions. These countermeasures reflect China’s resolve to retaliate against what it perceives as unjustified U.S. interference in its technological development.

• How Innovative Is China in Semiconductors? | ITIF

  industry, as companies depend on the profits from one generation of semiconductor products to finance the R&D expenses that go into innovating the next generation. This has been a significant challenge for global memory chip manufacturers as well—and this dynamic threatens to extend to every semiconductor subsector which China aggressively subsidizes. [...] Thus far, those efforts have met with uneven success. With regard to the fabrication of leading-edge logic semiconductor chips, China’s flagship competitor, the Semiconductor Manufacturing International Corporation (SMIC), likely stands about five years behind global leaders such as the Taiwan Semiconductor Manufacturing Company (TSMC).2 As G. Dan Hutcheson, vice chair of research firm TechInsights, explained, “Ten years ago, [Chinese companies] were two generations behind. Five years ago, they