US China chip ban: How much to pay?

Tram Ho

The US government’s latest ban on China’s acquisition of technology needed to make advanced chips is expected to slow the growth of US competitors in the high-performance chip sector.

However, according to the Financial Times, US policymakers do not seem to fully appreciate the consequences of “dividing” the world’s semiconductor supply chain. This will be much more costly for Western manufacturers and their customers. In addition, in the long run, the US ban on Chinese technology will increase the price of chips.


Lệnh cấm chip Trung Quốc của Mỹ: Giá phải trả là bao nhiêu? - Ảnh 1.

The US accounts for 12% of the global chip market, but companies in the US cannot mass-produce high-end chips. Despite this delay, the US maintains enormous influence over the global chip supply and many stages of the semiconductor manufacturing process, including: design, research, development, manufacturing, and manufacturing. chip testing – based on US-origin technologies. This is especially true of the machinery needed to make the most advanced chips.

It is known that the US is home to three major manufacturers of chip-making machinery: Lam Research, KLA Corporation and Applied Materials. Other Western machinery manufacturers, such as ASML in the Netherlands, may not be directly subject to the US ban, but this situation may change in the future.

“The big question is how did China get the chipmaking machinery,” said Boris Murmann, a professor of engineering at Stanford University and an expert in chip design and machine learning. The latest chips are made using the 5 nanometer process.The machinery to make these chips has been in development for more than 15 years.China did not carry out the research and development of these chips early on. Their mistakes and time lags are huge.”

According to the Financial Times, the US ban is aimed at maintaining a technology gap of about two generations between China’s chipmaking capacity and the rest of the world.

Mark Li, a Bernstein semiconductor analyst in Hong Kong, said that the restrictions will not be adjusted according to the advancement of technology or as time goes on, but the latest ban is to maintain position. America’s biggest possible lead, and that means the limits are likely to widen over time.

Lệnh cấm chip Trung Quốc của Mỹ: Giá phải trả là bao nhiêu? - Ảnh 1.

Workers at a factory in Guangdong (China) inspect semiconductor circuits. Photo: AFP

Many parties are affected

The Financial Times mentions that Chinese chipmakers will be most directly affected, and a large group of Chinese technology companies will also be affected at a second level.

But the Financial Times also argues that the risks posed by the latest US export controls to Western manufacturers are twofold.

On the one hand, China could implement its own technology export ban. On the other hand, China’s supply of low-cost chips to the West depends to a certain extent on the supply of chip-making machinery and intellectual property rights. If China can’t replace its aging production lines and intellectual property rights, its cheap chips may no longer work in the US or anywhere else.

Either way, costs will increase for Western manufacturers and their customers, as over the past five years China has been quietly dominating the market for low-cost chips currently in use. in most consumer and industrial electronics.

Donghwan Kim, CEO of technology-focused venture capital firm Hana Ventures, said that Chinese chipmakers are catching up much faster than anyone expected in terms of processor chip market share. management maturity, and China’s advantage lies in its ability to sell chips at much lower prices than its global competitors.

Finally, the Financial Times points out, the US ban will increase the cost of everything from biotechnology, finance, autonomous driving to artificial intelligence (AI) … and reduce the ability to Competition of Chinese products, American companies that import or use cheap Chinese-made chips will also be affected.

For example, the global surveillance camera market is dominated by Chinese companies, with Hikvision and Dahua Technology controlling about 60% of the market. As for the consumer segment, China’s global share of electric vehicles, smartphones and cloud services is expanding rapidly.

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Source : Genk