Title: China Responds to US Chip Curbs Amid Escalating Tensions
In light of the recent US restrictions on high-end technologies, particularly in the semiconductor industry, China has voiced its concerns and called for an end to the politicization and weaponization of tech and trade issues. The Chinese Foreign Ministry spokesperson, Mao Ning, emphasized that the US should refrain from disrupting global industrial and supply chains, and urged them to stop politicizing and instrumentalizing these matters.
The Biden administration’s unveiling of new chip export restrictions prompted a swift reaction from Beijing. Wang Wenbin, another spokesperson for China’s Foreign Ministry, previously commented on China’s opposition to the politicization and weaponization of trade and technology issues. Mao Ning reiterated these sentiments, expressing China’s commitment to closely monitor the situation and protect its rights and interests.
China’s response comes in the wake of Applied Materials, an American semiconductor equipment maker, allegedly violating export restrictions by supplying equipment to China’s leading chipmaker, SMIC, via South Korea without the required licenses. The US Justice Department is currently investigating this potential violation, which involves equipment worth hundreds of millions of dollars. Consequently, Applied Materials’ stock experienced a significant decline, highlighting the challenges faced by American tech companies amid the tightening control by the US government.
Nvidia, a major player in the artificial intelligence (AI) chip market, also had to adapt its business strategies in China due to these export controls. To maintain its presence in the Chinese market, Nvidia plans to release a new set of chips specifically tailored for China. However, these chips are reduced in performance compared to their original versions. For example, the HGX H20 chip’s overall computing power is approximately 80% less than its predecessor, demonstrating the impact of the export controls on American tech companies.
These developments come in the context of the US Department of Commerce’s introduction of new export control rules regarding advanced computing items and semiconductors. The aim is to limit China’s access to cutting-edge semiconductors that could bolster advancements in artificial intelligence and sophisticated computers. These measures have prompted concerns within the Chinese industry, with fears of falling behind competitors such as Microsoft-backed OpenAI in terms of computing power.
Chinese companies such as Tencent and ByteDance have also been affected by the export control rules, as they have not received ordered products, including Nvidia’s H800 GPUs. Even the weakened A800 GPU, an alternative to Nvidia’s high-end A100 processor, requires a license for export under the new restrictions.
China’s response to the US chip curbs reflects the escalating tensions between the two countries. While the US aims to limit China’s access to critical technologies, China contends that such actions politicize and destabilize trade and technology, urging the US to reconsider its approach. The ongoing developments in the semiconductor industry underscore the far-reaching implications of these restrictions for global industrial and supply chains.
The situation between China and the US remains fluid, and it is essential to closely monitor further developments as both countries navigate this increasingly complex and contentious landscape.
