Under the leadership of its President Joe Biden, the United States is putting in place strict restrictions against China to hinder its supply of semiconductors. With this severe embargo, Washington wants to greatly hinder the technological development of Beijing.
Relations between the United States and China are souring. In a context where the embargo imposed on Huawei by Washington remains a major issue between the two superpowers, the administration of President Joe Biden has published a new batch of heavy restrictions. However, this time, it is not specific companies that are targeted, but an entire country.
The new provisions aim to strengthen export controls on technology originating in the United States. And, among the measures announced, there is one that seeks to deny China access to certain semiconductors, regardless of their origin, as long as they contain American material.
US takes on China
The goal is clear: to delay the technological and military development of the Middle Kingdom. Note also that these restrictions come as Washington and Beijing are increasingly raising their voices around Taiwan. Mainland China wants to annex this US-allied island state. A war of influence at loggerheads that some fear will one day slip into armed conflict.
Some new US restrictions apply now. The initiative is not new. As pointed out Reutersthe Biden administration had already sent letters earlier this year to major manufacturers asking them to stop shipments of equipment to 100% Chinese factories.
“Bringing China Back Years”
The news agency even believes that this series of measures ” could be the biggest change in US policy on delivering technology to China since the 1990s“. With these restrictions, suppliers, even foreign ones, using American equipment should no longer be able to supply some of the main Chinese factories, in particular those involved in the design of chips.
Asked byReutersJim Lewis, a technology and cybersecurity expert at the Center for Strategic and International Studies, believes that “this will set china back years“. “China isn’t going to give up on chip manufacturing… but it will really slow it down.»
Taiwan (and TSMC) in the American camp
For now, there is no indication whether other Western powers intend to apply the same kind of restrictions against China. On the other hand, the Taiwanese government quickly showed that it was quite inclined to follow these new American rules against Beijing.
Beyond the political, geographical or even military issues, Taiwan occupies a central place in the semiconductor market. The island has several giants in the sector and specifically the ogre TSMC which manufactures chips for a plethora of companies such as Apple, Qualcomm or Nvidia. This could have big repercussions.
China reacts
For its part, the Ministry of Commerce in China has expressed its deep disagreement with Washington’s policy, which it considers dangerous for the health of supply chains around the world. “The United States should stop its actions immediately and provide fair treatment to companies around the world.»
Same story on the side of the Ministry of Foreign Affairs which denounces abuses to reinforce “technological hegemony” the United States. Remember that the US sanctions against Huawei have greatly weakened the latter on the smartphone market. Moreover, the Chinese brand seems to have given up outside its native country.
What repercussions?
At present, it is difficult to predict the magnitude of the impact of these measures. We do not know precisely what types of semiconductors are affected by this new embargo. An expert in defense policy at the American Enterprise Institute, Éric Sayers, sums up the situation well. “The scope of the rules and the potential impacts are quite staggering, but of course the devil will be in the details of the implementation.»
Potentially all tech industries can be affected, from laptops to connected watches and TVs. We think of the countless smartphone manufacturers like Xiaomi, Oppo or Vivo, but also of the electric car sector where Chinese car brands are making a big breakthrough.
It would also not be impossible to see this situation aggravate the inflation that the tech market as a whole is experiencing. However, it is worth clarifying that several restrictions included in the new measures seem to be primarily intended to harm the Chinese military by limiting its technological development.
To follow us, we invite you to download our Android and iOS application. You can read our articles, files, and watch our latest YouTube videos.