In a significant escalation of the ongoing tech war, key U.S. lawmakers, including House China Select Committee Chairman John Moolenaar and Ranking Member Raja Krishnamoorthi, have urged Commerce Secretary Gina Raimondo to block Huawei suppliers from acquiring U.S. chipmaking equipment. This move targets companies like Pengxinxu, SwaySure Technology, and Qingdao Si’En, which are part of Huawei's network. The U.S. has already imposed restrictions on advanced chip sales to China, affecting major firms such as Applied Materials, Lam Research, and ASML. [84aeef77]
The urgency of these measures has been heightened by Huawei's recent launch of a smartphone utilizing a 7-nanometer chip from SMIC, prompting lawmakers to call for stricter controls. Concerns have been raised about Huawei stockpiling chip tools during negotiations, leading to proposals to add over 120 Chinese companies to the U.S. entity list. [84aeef77]
Adding to the complexity, Chairman John Moolenaar criticized the export control policy after reports revealed that TSMC-manufactured chips were used in Huawei's AI accelerators. He labeled this a "catastrophic failure" of the export control measures, emphasizing the implications for national security. Moolenaar has called for immediate answers from the Bureau of Industry and Security (BIS) and TSMC regarding this situation. [4b864185]
Recent findings indicate that TSMC technology is present in Huawei's Ascend 910B AI processor, raising questions about the effectiveness of U.S. sanctions. Although TSMC halted shipments to an unnamed customer after discovering its chips in Huawei products, the company has not supplied Huawei since September 2020. The Ascend chips are crucial for China's ambitions in AI, with the 910B model emerging in 2023, claimed to rival Nvidia's A100. Analysts note that Huawei's 910C chip is currently being tested by select customers, highlighting ongoing challenges for China in advanced chip-making. [ff170030]
As the U.S. tightens its grip on semiconductor exports, U.S. chip equipment firms are increasingly worried about losing market access in China, which remains a critical market for many technology companies. Meanwhile, Japan is showing hesitance to comply with U.S. demands due to fears of potential retaliation from China. [84aeef77]
This development comes as China continues to grapple with the repercussions of stringent U.S. restrictions that have been in place since 2019. These restrictions have significantly impacted China's technological landscape, particularly in the semiconductor sector. Analysts suggest that these barriers may be insurmountable for China, which is striving to develop its high-tech industries amidst these challenges. [b062c710]
In a recent analysis, U.S. Deputy Secretary of State Kurt Campbell advocated for Chinese students to pivot towards humanities instead of STEM fields, reflecting a broader strategy to limit China's technological growth. Interestingly, some experts believe that U.S. export controls may inadvertently accelerate China's technological advancements as the country seeks alternative pathways to develop its semiconductor capabilities. [b062c710]
Despite these restrictions, Huawei's Mate 60 Pro smartphone has emerged as a symbol of China's resilience, showcasing advancements in chip development despite the sanctions. This smartphone indicates that the semiconductor supply chain is heading towards fragmentation, as China seeks to establish its technological independence. [b062c710]
In response to the evolving semiconductor landscape, Dutch Economy Minister Dirk Beljaarts recently expressed frustration over U.S. semiconductor trade restrictions during his visit to Washington. He emphasized the importance of allowing ASML, the largest supplier of semiconductor equipment globally, to operate freely, as the company faces increasing pressure from U.S. export controls aimed at limiting technology transfers to China. [b691f26a]
Beljaarts announced plans to create a European Union 'coalition of the willing' to enhance domestic chip industries, aiming to compete with the U.S. and China. This announcement was made during a G7 meeting in Rome, where he emphasized the need for EU collaboration to strengthen its global position. The EU's Chips Act, launched in April 2023, aims for a €43 billion subsidy to increase Europe's chip market share to 20% by 2030. [84a890bf]
The geopolitical landscape surrounding ASML is increasingly complex, with the company reporting that approximately 45% of its sales were directed towards the Chinese market in Q2 2024. CEO Christophe Fouquet has voiced concerns regarding the motivations behind U.S. sanctions, suggesting they are economically driven rather than based on national security concerns. [951ba747] [947c3614]
As the situation evolves, both the U.S. and Dutch governments are navigating the delicate balance between national security interests and the economic implications of restricting trade with China. Beljaarts highlighted the necessity for Dutch companies to conduct business freely, indicating a potential pushback against the tightening export controls. [b691f26a] Furthermore, former ASML CEO Peter Wennink criticized the U.S. chip trade war as ideological, reflecting a growing discontent among industry leaders regarding the impact of these policies on global trade dynamics. [c115d077]
In addition to these developments, notable advancements are occurring in Asia's tech landscape. Chinese companies like MiniMax and ByteDance are making strides in the U.S. AI market, while Japan plans to invest tens of billions of yen in quantum encryption technology over the next five years. Foxconn is also constructing a large AI server to meet demand for Nvidia's Blackwell chips, indicating a robust commitment to AI and semiconductor innovation in the region. [947c3614]