USA shackles China's chip industry with export controls on high-end semiconductors
The Biden administration has imposed far reaching export restrictions on the semiconductor industry and they are clearly aimed at curtailing China's ability to manufacture chips and use them for making supercomputers for military purposes. The Chinese chip industry has reacted sharply and the impact of the restrictions are being felt by leading manufacturers across the world.
The United States has imposed export controls to restrict China's ability to make high-end semiconductors. These restrictions, imposed by the US Department of Commerce are aimed at the Chinese manufacturing of advanced computing chips, supercomputers, and advanced semiconductors.
The Joe Biden administration has said China is using high-end chips for military systems and AI for surveillance on the United States and therefore these export controls are a national security priority.
These changes have far reaching consequences; basically a ban on export of all semiconductors made with any US equipment or by a US citizen to China. This ban applies to all nations and companies using US equipment.
Non-compliance will restrict a company's access to US technology and those not cooperating will be put in the entity list or subject to sanctions requirements.
As a consequence, Apple has put on hold plans to use memory chips from Chinese YMTC. Apple wanted to use YMTC chips as they are 20 percent cheaper than other players.
The Chinese semiconductor industry has reacted by calling these restrictions arbitrary and that the controls will put more stress on global supply chains. A Chinese semiconductor association has urged the US government to reverse this decision.
The Indian industry feels these US export controls have will a sweeping impact and that the import of electronic sub-assemblies and modules from China will run into trouble in the short run.
Supply chain disruptions related to RAM modules, components of modems, mobile phones, and laptops could be felt. In the long run, though the US export could help India with companies looking for alternate manufacturing destinations.
First Published: Oct 17, 2022 5:11 PM IST
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