The latest US sanctions in the form of restrictions on the export of the latest high technology such as EUV exposure systems and DUV systems to China are wreaking havoc in the Chinese chip industry. China, for its part, has sharply criticized the measures taken by the USA.
US sanctions can set China back years
As the Handelsblatt reported, the Chinese chip industry is warning of the upcoming significant supply bottlenecks following the US export restrictions that came into effect with regard to the export of cutting-edge technology in the field of high-end chip production. As the website writes, the US sanctions are quite capable of “setting the Chinese chip industry back by years”.
Such a unilateral action by the US will not only further disrupt global supply chains in the semiconductor industry, but most importantly create an atmosphere of uncertainty.
China Semiconductor Industry Association (CSIA)
US security experts assume “that this step could set China back years in semiconductor development and in the production of high-performance and supercomputers”, which in turn has a very large impact on China's state military and surveillance programs, as per Tagesschau reported.
According to the United States Department of Commerce (DOC), the export ban affects all semiconductors worldwide and all equipment and tools required for semiconductor production made in the USA.
China's chip industry is isolated
While the foundry giant TSMC from Taiwan and the South Korean chip manufacturer Samsung are said to have received special permits, Chinese semiconductor manufacturers are completely left out.
This is primarily about EUV Exposure systems and the widely required DUV scanners, which are the backbone of any wafer exposure, but also around all other devices that fall into the field of high technology. KLA-Tencor, Lam Research and Applied Materials will also no longer supply equipment to Chinese plants that produce advanced logic chips.
The sanctions are seen by the overwhelming majority of the international press as a major US hit against the Chinese chip industry.
If anyone in China's chip industry was not yet afraid of the USA, Washington's most comprehensive export bans to date were the definitive wake-up call.
Neue Zürcher Zeitung
China, meanwhile, hopes the US will return to the procedures and negotiating tables of the World Semiconductor Council (WSC) and the Government and Authority Meeting on Semiconductor (GAMS), although the Americans may have other plans.
Supply chain is to migrate completely to the USA
As the Handelsblatt reported on October 7th, US President Joe Biden is said to be planning a supply chain for the US chip industry that is “end-to-end” based in the US.
The supply chain will start here and end here
Joe Biden, US President
Jordan Schneider, China Technology Analyst at the economic research company Rhodium Group, speaks in a detailed tweet of an “industry-wide decapitation” of the Chinese chip industry and goes into further details and background in detail. The US plans mean “annihilation” for China's chip maker.
THREAD: The US government's new export controls are wreaking havoc on China's chip industry.
New rules around "US persons" are driving an "industry-wide decapitation."
— Jordan Schneider (@jordanschnyc) October 14, 2022
Dutch government supports US sanctions
Dutch company ASML, itself the world's largest supplier of lithography systems to the semiconductor industry, has also stopped providing service and support to mainland China. In early July, the US Department of Commerce approached the Dutch government with a request to keep ASML DUV systems out of China.
Many people don't understand why this is annihilation.
ASML has stopped providing services and support to mainland China. pic.twitter.com/AvT31p9qvk
— Jordan Schneider (@jordanschnyc) October 14, 2022
Samsung and TSMC receive a one-year deferment
The South Korean and Taiwanese chip manufacturers Samsung, SK Hynix and TSMC as well as the American government have already signed a corresponding one-year special permit and received a “delay” for the changed framework conditions to come into force.
