December 4, 2022

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USA vs. China: New chip ban will have devastating effects

It’s been up in the air, but now it’s official: United State They want to hit the industry harder China chip with new ban Which could expose the Xi Jinping nation to serious difficulties. What is about to be implemented is the expansion of export blocks to China; A rule based on the Foreign Direct Product Rule, a 1959 law that states that if a product is manufactured using US technology, even abroad, the US government can prevent its sale. It’s the same dynamic that applies to ban companies like HuaweiAnd the SMIC And the DJIThis time, the focus is on three main areas: equipment For making advanced semiconductors, supercomputer And the memories.

New repercussions of the technological conflict between the United States and China

In the first case, the United States wants to ban any global machinery manufacturer for Advanced semiconductor printing that use American technologies to sell to China. Limit that would practically touch every company In this sector, not only US Applied Materials, KLA and Lam Research, but also those outside US borders. In addition to printing, blocking the shipment of advanced semiconductors to China would particularly target the world supercomputer; To be precise, systems from Over 100 petaflops Capable of performing more than 100 trillion operations per second.

A type of machine that is also used in military fields, and that will be a threat to security, especially after Chinese military exercises in Taiwan to visit US House President Nancy Pelosi. The concerns you look at too The conflict in Ukraine: If China is able to produce advanced chips, it can sell them to Russia and strengthen the war sector.

China chips crisis

However, the risk for China is that powerful data centers of non-military but commercial realities such as Baidu, Tencent, Alibaba and ByteDance will be affected. Also, the same American companies NVIDIA and AMD They may be affected, as they are among the major (if not the only) suppliers of core chips for supercomputers, artificial intelligence, clouds, and servers. Meanwhile, China is working on Alternatives to NVIDIA GPUsbut it will take time to see if they can actually replace it.

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Finally, the new US ban also affects the Memories in China: often abbreviated to YTMC, Yangtze (along with 30 other Chinese companies) was officially included in Entity List. YMTC allegedly violated US export controls in favor of Huawei, and the ban ended up because China did not allow US authorities to investigate the case. But not only YMTC, because the effects of the ban should also affect other Chinese realities such as ChangXin and JHICCwhich puts pressure on the Chinese domestic market for memories dirhams And the nand.

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New US Ban on China: What to Expect?

after tightening 4 . chip alliance With Taiwan, South Korea and Japan having established Chips LawThis is another step against the United States towards China. We saw it recently, with Blocking material and software Essential to China’s technological progress, we’re seeing it for sure again. It will be interesting to see what other countries do: The United States does not guarantee that allied countries will do the same, and discussions are ongoing with allied countries. In particular, Japan and Europe, which own important companies such as ASML and Tokyo Electron, manufacturers of semiconductor printing machines of all kinds, even the most advanced in the world. In addition, South Korea was confirmed, where Chinese memory factories Samsung and SK Hynix are not expected to be affected by the new blocks.

For the Chinese Foreign Ministry, these moves would be “Abuse to Strengthen the Technological Dominance of the United States“.according to informed sources, this promises to be the biggest change since the 1990s in US policy toward Chinese technology.”This will set China back for years“says Jim Lewis, a cybersecurity expert at CSIS, noting how these policies relate to the strict regulations typical of the Cold War.”China won’t give up chip manufacturing…but this will really slow it downAccording to expert estimates, it may take 5-10 years for China to try to develop alternative production technologies to replace American ones.

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