TECH

Joe Biden's ''samurai coup'' in China's semiconductor industry

In early October, the United States of America introduced expanded export restrictions against China, which could delay the recovery of the Chinese semiconductor industry for many years. The new rules could inflict a painful wound at several points, notably in Chinese chipmaking, which is trying to keep up with the involvement of huge resources, which will make the multi-year technological delay even more difficult, experts believed at the time of the announcement.

The new regulation basically prohibits the export of all types of equipment and production lines used in the semiconductor industry that contain American technology and support the production process in any way to China, even if the equipment itself is not the product of a American company (such as the Dutch ASML). Furthermore, while so far the measure has only affected a few Chinese manufacturers (such as the largest Chinese semiconductor manufacturer, Semiconductor Manufacturing International Corporation, i.e. SMIC), it now generally applies to all Chinese-owned companies on the entity list. from the USA.

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In addition, any American citizen or legal entity can only work for a Chinese factory with a special permit from the Ministry of Commerce, otherwise this has also become prohibited, which mainly affects American-educated dual citizenship. For violating the sanctions, the states department of justice can arrest the person.

Jordan Schneider, a senior analyst at the Rhodium Group, says this based on local reports writes, that Chinese semiconductor production all but stopped after Biden essentially forced Americans working for China to choose between their jobs or American citizenship. Therefore, most American managers and engineers quit, which caused serious disruption overnight.

The Financial Times reports that US companies such as Lam Research, Applied Materials and KLA Corporation have taken immediate steps to comply with the new rules. Lam Research has begun laying off employees at Chinese memory chip maker Yangtze Memory Technologies Corp. and told employees to stay away from Chinese manufacturing companies for now.

In a letter, Dutch multinational ASML said that ASML employees in the US, directly or indirectly, must refrain from serving, sending or supporting customers in China until further notice.

According to the spokesperson for the China Semiconductor Industry Association, the measures will also have a negative impact on global supply as they create an uncertain atmosphere and undermine confidence, and tension between the US and China continues to rise. In August, Joe Biden signed the Chips and Science Act, a law that encourages investment in the US semiconductor industry, which provides a total of $52 billion in state subsidies for local and foreign companies that want to invest in the sector. At the same time, the granting of support does not mean that American production can immediately achieve a significant increase in volume, the construction of the complexes and obtaining full production capacity will take several years.

mundophone