Page 162 - 2023 White Paper on the Business Environment in China
P. 162
3 White Paper on the Business Environment in China
for robots, rich resources for innovation, and a Beijing put a lot of focus on self-sufficiency
desirable development environment and robot in various areas of technology, but especially
industrial ecosystem (Xinhua, China’s Robots). on semiconductors. The drive to boost China's
domestic chip industry was given further impetus
Semiconductor Equipment and as the trade conflict between the US and China
Materials began. In its five-year development plan, the 14th
of its kind, Beijing said it would make “science and
China's ambitions to boost its domestic chip technology self-reliance and self-improvement
industry has likely become magnitudes more difficult a strategic pillar for national development.” One
and costlier after the US launched some of its most area it hoped to do so was in semiconductors. But
wide-ranging export controls related to technology the US restrictions put a dent in those ambitions
against Beijing. The US Department of Commerce (Kharpal, Xi wanted).
introduced sweeping rules aimed at cutting China
off from obtaining or manufacturing key chips and China is estimated to have 55% and 85% of
components for supercomputers, in what is seen global rare earths mining and refining capacity
as a huge escalation in tensions between Beijing respectively. The US is concerned domestic
and Washington in the technology sphere. America manufacturers do not produce high-volume
argues that such advanced semiconductors can be cutting-edge integrated circuits, the foundation
used by China for advanced military capabilities. of paradigm shifting technologies. The US CHIPS
Companies require licenses to export high- Act focuses to fabricate these leading-node logic
performance chips, usually designed for artificial chips yet needs critical minerals from China, where
intelligence (AI) applications, to China. Even foreign- their supply chain is concentrated and which holds
made chips related to AI and supercomputing, that enormous mineral reserves for manufacturing
use American tools and software in the design and semiconductors. The semiconductor industry in
manufacturing process, will require a license to be China, as a result, is unlikely to be barricaded by the
exported to China. US companies will be heavily US' effort to counter its growth. This was evidenced
restricted in exporting machinery to Chinese from the SEMI data in April 2022: China's orders
companies that are manufacturing chips of a of chip-making equipment to overseas suppliers
certain sophistication. Semiconductors are some had increased 58% in 2021. This revenue increase
of the most important technology products. They of up to four-fold suggests the foreign firms won't
go into everything from smartphones to cars and concede the immense Chinese market. Instead,
refrigerators. But they're also seen as key to military they have indicated to avoid sanctions by building
applications and advancing artificial intelligence capacity outside of the US (Azam).
(Kharpal, America’s Once).
If enforced broadly, the regulations could
bar research labs and commercial data centers'
access to advanced AI chips, prevent Chinese
chip fabs from purchasing critical manufacturing
equipment, and force US nationals working at
advanced Chinese chip companies to resign. "Not
only will such unilateral measure harm the further
global supply chain of the semiconductor industry,
more importantly it will create an atmosphere of
uncertainty, which will negatively affect the trust,
goodwill, and spirit of cooperation that the players
of the global semiconductor industry have carefully
cultivated over the past decades," the China
Semiconductor Industry Association (CSIA) said in
a statement (Reuters, China Chip).
162
for robots, rich resources for innovation, and a Beijing put a lot of focus on self-sufficiency
desirable development environment and robot in various areas of technology, but especially
industrial ecosystem (Xinhua, China’s Robots). on semiconductors. The drive to boost China's
domestic chip industry was given further impetus
Semiconductor Equipment and as the trade conflict between the US and China
Materials began. In its five-year development plan, the 14th
of its kind, Beijing said it would make “science and
China's ambitions to boost its domestic chip technology self-reliance and self-improvement
industry has likely become magnitudes more difficult a strategic pillar for national development.” One
and costlier after the US launched some of its most area it hoped to do so was in semiconductors. But
wide-ranging export controls related to technology the US restrictions put a dent in those ambitions
against Beijing. The US Department of Commerce (Kharpal, Xi wanted).
introduced sweeping rules aimed at cutting China
off from obtaining or manufacturing key chips and China is estimated to have 55% and 85% of
components for supercomputers, in what is seen global rare earths mining and refining capacity
as a huge escalation in tensions between Beijing respectively. The US is concerned domestic
and Washington in the technology sphere. America manufacturers do not produce high-volume
argues that such advanced semiconductors can be cutting-edge integrated circuits, the foundation
used by China for advanced military capabilities. of paradigm shifting technologies. The US CHIPS
Companies require licenses to export high- Act focuses to fabricate these leading-node logic
performance chips, usually designed for artificial chips yet needs critical minerals from China, where
intelligence (AI) applications, to China. Even foreign- their supply chain is concentrated and which holds
made chips related to AI and supercomputing, that enormous mineral reserves for manufacturing
use American tools and software in the design and semiconductors. The semiconductor industry in
manufacturing process, will require a license to be China, as a result, is unlikely to be barricaded by the
exported to China. US companies will be heavily US' effort to counter its growth. This was evidenced
restricted in exporting machinery to Chinese from the SEMI data in April 2022: China's orders
companies that are manufacturing chips of a of chip-making equipment to overseas suppliers
certain sophistication. Semiconductors are some had increased 58% in 2021. This revenue increase
of the most important technology products. They of up to four-fold suggests the foreign firms won't
go into everything from smartphones to cars and concede the immense Chinese market. Instead,
refrigerators. But they're also seen as key to military they have indicated to avoid sanctions by building
applications and advancing artificial intelligence capacity outside of the US (Azam).
(Kharpal, America’s Once).
If enforced broadly, the regulations could
bar research labs and commercial data centers'
access to advanced AI chips, prevent Chinese
chip fabs from purchasing critical manufacturing
equipment, and force US nationals working at
advanced Chinese chip companies to resign. "Not
only will such unilateral measure harm the further
global supply chain of the semiconductor industry,
more importantly it will create an atmosphere of
uncertainty, which will negatively affect the trust,
goodwill, and spirit of cooperation that the players
of the global semiconductor industry have carefully
cultivated over the past decades," the China
Semiconductor Industry Association (CSIA) said in
a statement (Reuters, China Chip).
162
