The US-led restrictions over advanced chipmaking equipment for Chinese firms will ultimately deter China’s efforts to develop an indigenous semiconductor industry, according to a senior American official responsible for enforcing export controls.
(Bloomberg) — The US-led restrictions over advanced chipmaking equipment for Chinese firms will ultimately deter China’s efforts to develop an indigenous semiconductor industry, according to a senior American official responsible for enforcing export controls.
Huawei Technologies Co.’s recent release of a 5G phone powered by an advanced 7-nanometer chip made by Semiconductor Manufacturing International Corp. set off a debate in Washington over the effectiveness of US attempts to curb China’s technological advancement, but Under Secretary of Commerce for Industry and Security Alan Estevez said export controls will eventually crimp the Asian nation’s capabilities to produce semiconductors.
“Those controls are also related to components of those things. Those machines will break down at some point or another, which will impede further progress” in China’s efforts to develop its own chip industry, Estevez told reporters on the sidelines of the Mt. Fuji Dialogue, an annual US-Japan policy exchange platform attended by American and Japanese luminaries, in Tokyo on Saturday.
The US has been working with Japan and the Netherlands on limiting China’s access to advanced chipmaking gear, and the measures include restrictions on Beijing’s attempts to secure spare parts for their existing machines. ASML Holding NV has been shipping advanced deep ultraviolet lithography chip-making gear to China this year but those shipments and support will largely end in 2024.
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Estevez did not indicate whether the US will sanction Huawei and SMIC further, but said that it is “absolutely” a concern for Washington that China could use the advanced 7-nanometer technology on military applications.
The Biden administration unveiled additional export control measures earlier this week to tighten China’s access to advanced semiconductors capable of training artificial intelligence algorithms and to chipmaking gear. Washington also rolled out rules to require firms to obtain licenses to sell the chips to more than 40 countries to prevent China from obtaining them through intermediaries.
However, Washington has yet to prevent Chinese firms from utilizing overseas cloud computing services to train their AI models. Estevez acknowledged that this is an area in which his agency still has work to do.
While export controls are the right mechanism to handle certain issues, they may not necessarily be the best tool to deal with potential attempts by Chinese firms to dump lower-end chips on the global market, Estevez said.
“There are other tools for getting after dumping, countervailing duties, there’s 232, there’s 301 investigations,” he said, referring to US Acts that enable Washington to investigate and respond to unfair trade practices and imports that affect national security.
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