Year in a word: Chip choke

Year in a word: Chip choke

Time Stamp: January 1, 2023 7:00 AM
Source Node: 1861172

(noun) the US campaign to strangle China’s deep-tech ambitions

2022 was the year when the world’s politicians fully woke up to the computer chip industry’s critical importance to the global economy. They also realised how worryingly dependent the major powers have become on the semiconductor hotspot and geopolitical flashpoint that is Taiwan. Governments are now pumping huge sums of money into the industry to reshore chip production and restore “technological sovereignty”. To that end, China, the US, the EU, Japan and India have collectively promised $190bn in subsidies over a decade, according to New Street Research.

As well as boosting its own chip manufacturing capacity, the US is trying to throttle that of its chief strategic rival: China. Since 2020, Washington has been tightening its “chip choke” on Beijing, trying to deprive the country of access to the most sophisticated, cutting-edge chips. Just as the US has wrecked the global expansion plans of Chinese telecoms equipment companies, Huawei and ZTE, so it is now targeting its chip manufacturers, SMIC and YMTC, to deprive them of access to critical technology. In October, Washington added sweeping export controls, seeking to prevent China from obtaining or manufacturing advanced computer chips. One analyst compared the move to a declaration of war on China’s ambitions in high-performance computing.

Washington’s aggressive stance will certainly delay, but probably not derail, China’s efforts to produce the cutting-edge chips that power artificial intelligence models. Beijing is already moving heaven and earth to strengthen its domestic manufacturing base. But the US moves are also squeezing allied countries, including South Korea and the Netherlands, that are important strategic players in specialist chip and semiconductor equipment markets. Such countries are increasingly being forced to pick a colour as the industry divides between US-oriented “blue” supply chains and China’s “red” ones.

john.thornhill@ft.com

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Year in a word: Chip choke Republished from Source https://www.ft.com/content/b041b2ce-2137-4c14-aa81-9903b29f8978 via https://www.ft.com/companies/technology?format=rss

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