Home Economy U.S. export controls on China semiconductors force suppliers to cut ties

U.S. export controls on China semiconductors force suppliers to cut ties

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Western suppliers are beginning to cut ties with some Chinese chip makers in response to new U.S. export restrictions. This is another sign of the partial technological decoupling the Biden administration has ordered to impede China’s military development.

ASML, a major supplier of chip-making equipment, has told its U.S. employees to stop installing or repairing equipment at chip factories in China while it sorts out new rules. Another equipment provider, Applied Materials, said export restrictions prevented it from achieving nearly $400 million in sales in the fourth quarter.

Western companies typically halt exports entirely immediately after new U.S. restrictions, then resume them once the rules are deciphered, lawyers say. But national security experts new limitIts purpose is to stop China from producing advanced chips.

“I think these export controls are very important. It goes straight to the heart of Beijing’s efforts to create a domestic world-class semiconductor industry. A new rule banning from supporting certain Chinese chipmakers “will not only freeze China’s capabilities, but will actually lead to their deterioration over time,” Lasser said.

US imposes strict rules restricting China’s access to tech chips

Willie Shih, a professor of technology and manufacturing at Harvard Business School, warned that trade restrictions could have unintended consequences for the United States. If China is deprived of the ability to make cutting-edge chips, it could push China to produce even more low-end chips, driving prices down and making it harder for U.S. and Western factories to compete in that space. Yes, he said. As a result, Western buyers of such chips may end up relying on Chinese suppliers.

“It’s a bit of a blunt measure,” he said of export controls. “What you have to worry about is collateral damage.”

The Department of Commerce, which oversees regulation, said it was wary of such adverse effects. “It’s something we continue to monitor and if there are unintended consequences, we will determine what adjustments are appropriate,” a Commerce Department official told the Post on Monday, adding that The person spoke on condition of anonymity because he was not authorized to speak publicly. .

The official added that the rules were “not designed to destroy everything” on trade, but only to “gain China’s ability to produce chips at a defined level.” .

The Biden administration said the export controls, announced on Oct. 7, are aimed at slowing China’s ability to produce high-end semiconductors with commercial and military technology and even weapons of mass destruction applications. rice field.China for now still late It lags behind Taiwan, South Korea and the United States in manufacturing the most high-tech chips.

The regulation essentially prohibits exports to China of US-made manufacturing equipment needed to produce advanced chips. It also prohibits exporting U.S. tools and components to Chinese factories that can make high-end semiconductors.

In a new step that appears to have led some companies to widely halt trade with China, the rule has changed to “Americans” (U.S. factories, as well as U.S. workers in foreign factories abroad and U.S. green card holders). ) are also prohibited from supporting the development. Or the production of advanced chips in China, unless licensed by the US government.

ASML, a Dutch manufacturer of high-end semiconductor manufacturing tools with offices in the US and a large number of US employees, immediately instructed its US employees to freeze interactions with Chinese customers.

“ASML U.S. employees must refrain from directly or indirectly providing service, shipping, or support to customers in China until further notice. ASML is subject to this restriction. We are actively evaluating certain fabs,” the company told employees. A spokesman for ASML confirmed last week’s letter.

The freeze applies to U.S. citizens, green card holders, and foreigners living in the U.S., the company said.

The rule presents a tough decision for many tech workers, Lasser said.

“There are green card holders who are considered Americans who will be detained. Do they want to stay in China and give up their American status, or do they want to emigrate?” he said.

Other U.S. and Western suppliers also appear to have cut ties with Chinese chip factories. California-based KLA Corp. and Lam Research Corp. suspend support for equipment already installed, suspending installation of new equipment at Chinese chipmaker YMTC, The Wall Street Journal reportThe supplier declined to comment. YMTC did not respond to a request for comment.

The new restrictions put the burden on equipment suppliers to determine whether their Chinese customers are producing advanced chips. Kevin Wolfe, a former senior Commerce Department official who is now a partner at Aiken Gump Strauss Hauer & Feld, said equipment suppliers are “trying to figure out what the Chinese fabs are doing.” “Businesses that don’t want to make mistakes or break the law will go out.”

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