Chips Export Ban To China Razes Beijing's Ambitions

After four years of watching Donald Trump inflict flesh wounds on China with his ineffectual trade war, US President Joe Biden appears to have found the jugular.

Photo Insert: Targeting semiconductor chips could set back China’s tech ambitions by as much as a decade.

The goal is the same, but this knife is sharper—and could set back China’s tech ambitions by as much as a decade, Rishi Iyengar reported for Foreign Policy magazine.

The target: Semiconductor chips, especially the cutting-edge variety used for supercomputers and artificial intelligence. New export controls announced by the Biden administration this month prohibit the sale of not only those chips to China but also the advanced equipment needed to make them, as well as knowledge from any US citizens, residents, or green card holders.

The chips, wafer-thin and the size of a fingernail, underpin everything from our smartphones to the advanced weapons systems that the US called out in its filing announcing the export restrictions.

Perhaps more important—and this is where the US curbs will hurt China the most—they are indispensable to the technologies of the future, such as AI and self-driving cars, as well as virtually every industry from pharmaceuticals to defense.

China now accounts for 35 percent of the global market, according to the Semiconductor Industry Association (SIA).

However, that figure reflects the final sales of finished chips to electronics companies but the more high-tech and critical parts of the process, such as chip design and initial production, are still dominated by the US.

China has set out lofty ambitions for its technology sector, with several government plans over the past decade setting out targets such as self-sufficiency in high-tech manufacturing by 2025, global leadership in AI by 2030, and global industry standards dominance by 2035.

The latest US broadside is aimed squarely at that “Made in China” sign.

“I think this is part of also signaling to China that we are not just going to resolve to give China global leadership in some of these key areas,” said Daniel Gerstein, a senior policy researcher at the Rand Corp. who had served in the US Department of Homeland Security’s Science and Technology Directorate.

“We don’t want to lose and become beholden, if you will, to Chinese approaches.”

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