“I wouldn’t be surprised if some Western countries started discussing or introducing restrictions on the use of Chinese chips,” said historian Chris Miller, author of the 2022 book. said. chip warhe told the Post, adding that legacy chips will “become part of the public discourse and debate in the Western world.”
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Chinese scientists use diamonds to make high-power chips for electronic warfare
Miller said the U.S. government is concerned that Chinese government subsidies will lead to overcapacity and price distortions.
Miller said tariffs are a standard trade policy tool to address concerns about subsidized semiconductors from China, and other measures under consideration include possible new tariffs or restrictions on U.S. market access. He said it also includes gender.
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SMIC and Huawei to be top beneficiaries of Chinese government funding this year
He explained that “several companies said they were facing pricing pressure due to shifts in supply and demand for certain types of underlying chips,” adding that most of the Chinese government’s subsidies to the domestic chip industry He said that this was before the U.S. regulation.
According to a recent US Department of Commerce report, the Chinese government has provided an estimated US$150 billion in subsidies over the past decade. This created an “unequal global playing field for U.S. and other foreign competitors,” the report said.
In 2022 alone, the Chinese government awarded more than USD 1.75 billion in subsidies to 190 domestic listed semiconductor companies.
But Paul Triolo of the Washington-based consulting firm Albright Stonebridge Group expressed skepticism about concerns about overcapacity in the sector.
He said it was not clear that “China’s production capacity is close to overcapacity, especially since semiconductor consumption still accounts for 80 to 90 percent of imports,” adding that concerns were “a bit fanciful at the moment.” ”.
However, Triolo, a former U.S. government research analyst, said, “In the coming weeks, many Chinese semiconductor companies will be added to the U.S. Entity List (a list of foreign entities subject to U.S. licensing requirements). “Various measures will be taken,” he predicted. For export or transfer.
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Legacy chips are now considered to hold strategic value due to their versatility, used in the production of broadband, factory automation systems, military systems, and medical equipment.
The majority of chips manufactured around the world are legacy chips rather than advanced chips. According to research firm International Data Corporation, about 67% of semiconductors produced in 2021 were 16nm or larger.
A Rhodium Group report last April estimated that China controls about 30% of global production for chips in the 50-180nm range.
Still, the world’s largest manufacturing hub spends more on imported chips than on oil and produces about 36 percent of the world’s electronics.
China imported US$378 billion worth of semiconductors in 2020 and assembled 35% of the world’s electronic equipment, according to the US-based Semiconductor Industry Association.
According to official data, China’s chip imports totaled $349.4 billion last year, a 15.4% decrease in value from 2022. Despite the decline, chips remained the top item imported by the world’s second-largest economy.
Beijing is now aiming to become more self-sufficient.
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US ‘may already be behind’ in quantum technology entanglement with China: think tank
The company’s latest customs data shows that imports of chip-making equipment from China in October last year were lower than in the same period a year earlier, as mainland manufacturers rushed to buy tools before the latest U.S. trade restrictions took effect in November. There was a sharp increase of nearly 80% compared to the previous year.
The Chinese chipmaker is also expected to start production at 18 new factories this year, according to Semi.
Rhodium Group predicts that within 10 years, China could control about 46 percent of the world’s production capacity in the 50-180nm range, with mainland China and Taiwan combined having foundry production capacity in the 20-45nm range. It may be responsible for 80% of the Next 3-5 years.
Moreover, China’s mature process capacity, including chips above 28nm, is expected to increase by 29% to 33% by 2027, according to Taiwan-based market research firm TrendForce.
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Huawei returns to number one in smartphone sales in China
The alert ended Washington state’s most high-profile semiconductor measures, including targeting domestic manufacturing, export restrictions and foreign investment reviews.
That said, Washington appears to be leveraging legacy chips for closer surveillance.
Last October, the Commerce Department added some less advanced semiconductor manufacturing equipment to U.S. export control regulations, along with semiconductor manufacturing equipment used to make cutting-edge semiconductors.
In January, shortly after the first $35 million in Chips for America funding was allocated to advanced chips for fighter jets, the Department of Commerce awarded Arizona-based chipmaker Microchip Technology 1 to “support traditional chip manufacturing efforts.” Granted US$62 million.
The investigation comes after Raimondo said he had “heard enough anecdotally” that China’s subsidies for legacy chips were “starting to distort the U.S. market.”
The U.S. Department of Commerce is not the only one paying attention to this issue.
The Chinese government is “seeking to flood the U.S. and global markets with basic semiconductors,” the committee warned. The group called for “component tariffs” because most legacy chips are imported into the United States as part of finished devices.
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Replacing Chinese IT equipment in the US will cost billions more: analyst
While the U.S. government is considering stricter measures against legacy chips, it remains to be seen whether SMIC’s recent success in producing 7nm chips will be seen as a creative adaption to advanced semiconductor development. Opinions at home are divided.
Nevertheless, Miller believed that SMIC’s 7nm chip was not an “example of unique innovation.”
Either way, this development is causing concern in Washington. The Department of Commerce is currently investigating how SMIC obtained the tools to manufacture chips in apparent violation of U.S. regulations.
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Renewal of US-China science agreement depends on personal safety and reciprocity: academic
Triolo argued that SMIC’s 7nm chips are innovative in the sense that the chipmaker “reused these tools in a way that the industry outside of China hasn’t done.”
Additionally, he said, it is difficult to assess the success of technical control measures because their goals appear to be changing.
He added that the key point of this measure is that the United States is “trying to prevent China from accessing semiconductors that can be used for military purposes.”
Although the United States is primarily concerned about cutting-edge chips, advanced semiconductors are not widely used in military applications, so it is older legacy chips that currently pose a significant threat.
“Most basic military systems,” Toriolo said, “use mature node semiconductors.”