The ” semiconductor war ” between the United States and China began in October 2022.
when Washington moved to restrict Beijing ‘s access to the latest developments in semiconductor technology, citing national security concerns.
China refuted these assessments and accused the United States of practicing “technological terrorism” and unfairly hindering its economic growth.
Why are chips important?
Microchips power the world economy . These tiny, thin silicon components are found in all sorts of electronic devices, from LED light bulbs to cars, washing machines and cell phones .
They are also essential for the proper functioning of computer systems in the judicial and health, transport and energy areas, in most countries.
According to a report last year by consulting firm McKinsey, microchips will represent a $1 trillion market by 2030.
And they are essential for China , the world’s second largest economy, where the massive manufacture of electronic devices depends to a large extent on the import of chips .
Chinese imports of these components reached the equivalent of 430 billion dollars in 2021, a figure higher than its oil purchases.
Why is the US targeting China?
Beyond iPhones , Tesla cars and Playstation consoles — all with production plants in China — the most powerful chips are essential for the development of artificial intelligence or next-generation military systems.
Washington announced in October 2022 controls to prevent China ‘s access to “sensitive technologies with military applications.”
The Netherlands and Japan followed suit the following month ; While neither of these countries ever mentioned China , these moves irritated Beijing.
Should China worry?
Chip manufacturing is extremely complex. Many steps depend on American developments or on Japanese and Dutch companies, hegemonic in producing machines capable of printing integrated circuit diagrams.
” China will take years to develop equivalent alternatives to which it no longer has access,” Chris Miller, author of ” Chip War: the fight for the World’s most critical technology” told AFP . most critical in the world).
“If it were that simple, Chinese companies would have done it already,” he adds.
What are the effects of sanctions?
Before the US decision, Chinese companies had built up stockpiles of chips and other components to temporarily cushion the impact of sanctions.
But some Chinese companies, unable to access the components, have already lost lucrative overseas contracts and have been forced to lay off staff and freeze expansion projects.
The restrictions affected some major Chinese chipmakers such as Yangtze Memory Technology Corp ( YMTC ).
One of the harshest sanctions has been to block access to highly-skilled labor after the United States banned its citizens from working in high-tech areas for Chinese companies.
A survey among Chinese companies in the sector estimated that by 2024 they will need 800,000 foreign workers.
What is the Chinese response?
Beijing reacted angrily, pledging to accelerate its efforts to reach 70% self-sufficiency in semiconductors by 2025.
Tens of billions of dollars were injected into national production, without immediate results.
According to experts, today China meets less than 20% of its demand. You may reach your autonomy goal, but it will take time.
To circumvent the sanctions, researchers from the Chinese Academy of Sciences proposed more effectively channeling investment into pure research.
One of its main beneficiaries appears to be YMTC , which has received a $7.1 billion injection since new export controls went into effect.
Bill Gates “doesn’t think the US can stop China from having good chips.” But “we’re going to force them to spend time and a lot of money to make their own,” the Microsoft co-founder said in March .