U.S.-Led Chip Export Bans Choke Chinese Companies

The US has moved to block China's access to the most advanced semiconductors and the equipment and talent needed to make them in recent months, citing national security.

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China has dismissed those concerns, accusing the US of "technological terrorism" and unfairly hindering its economic growth. It has sought to counter the US containment measures, the Agence France-Presse (AFP) reported.

Globally, semiconductors are forecast to become a $1-trillion industry by 2030, a McKinsey report published last year said. Nowhere is these chips absolutely needed than in China, which relies on a steady supply of foreign chips for its huge electronics manufacturing base.

In 2021, China imported semiconductors worth $430 billion -- more than it spent on oil. The US imposed chips export controls last year, saying they were meant to prevent "sensitive technologies with military applications" from being acquired by China's armed forces.

The Dutch government followed suit in March this year, imposing controls on foreign sales to prevent military use.

The same month, Japan banned exports of chips to prevent "the military diversion of technologies." The Netherlands, a NATO member, and Japan -- a US treaty ally -- did not name China, but their restrictions infuriated Beijing.

Many stages of chip production depend on US inputs while Japanese companies supply ceramics and chemicals used to clean up wafers and the Netherlands' ASML practically monopolizes the production of lithography machines that print patterns on silicon wafers.

This gives the trio an outsized influence on the global semiconductor industry.

"It will take years for China to develop domestic alternatives that are equally capable to the tools it is losing access to," Chris Miller, author of "Chip War: The Fight for the World's Most Critical Technology," told AFP. "If it was easy, Chinese firms would already have done it."

US sanctions are also drying up the talent pool China had relied on. Chinese chip companies estimated a need for 800,000 foreign workers by 2024. No Americans are expected to work for Chinese chip companies as Washington has barred US nationals from working in the industry.

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