November 26, 2022

China Calls Top Chip Execs For Emergency Talks After Biden Unleashes Economic War

Biden administration’s technological decoupling appears to be hitting China’s main point here

Last week, President Biden  announced new limitations   on ALL OF US firms selling semiconductors to China, including  restrictions   on US citizens working at Chinese nick plants.

Nobody might have observed, but this is a full-blown financial war on China, a method to prohibit the country’s increase as a high-tech superpower.  

Since the new restrictions, China’s Ministry associated with Industry and Information Technology (MIIT) has summoned executives from your country’s top chip companies for emergency meetings in the last week to evaluate the damage, in accordance to  Bloomberg . Execs from Yangtze Memory space Technologies Co. and supercomputer firm Dawning Information Industry Co. met with MIIT.  

Biden’s strategy to paralyze its biggest opponent since the end from the Cold War could be encouraging. People familiar with the closed-door discussions between MIIT and top Chinese execs state there’s a lot of uncertainty on how to move ahead. For now, there was no reference to counter-measures. MIIT said there would be enough domestic demand for that affected chip companies with US expertise pulled out of industrial facilities and chip shipments through the US and elsewhere stopped.  

The particular discussions revealed that a few participants feared the US technique could doom China’s goals to accelerate the advancement and production of innovative chips. Someone familiar with the particular meetings said at least one person explained to MIIT that the state’s cutting-edge chipmaking could be in trouble.  

A good example of how the new restrictions have previously wreaked havoc in the industry is usually AI chipmaker Biren’s launch of a new general-purpose visuals processing unit, “ setting a new record in global computing power. ” Nevertheless , the firm contracted with Taiwan Semiconductor Manufacturing Co. to produce its chips using advanced 7-nanometer technology. There are a risk that TSMC may terminate any dealings with all the company because of Biden’s new restrictions. Biren has no options to manufacture advanced GPUs domestically due to the lack of high-tech chip equipment and  the lack of personnel .  

We observed mid-last week that US personnel pulled out of state-owned Yangtze Memory Technologies Company., while Netherlands-based ASML Keeping NV halted shipments with regard to Chinese chip companies. There are even reports that Dawning Info, China’s top builder of supercomputers, is scrambling as its access to premium US chips has vanished.  

Over the weekend, we mentioned Rhodium Group China expert Jordan Schneider — in whose blog,   China Talk , can be found  here , discussed Biden’s new chip export controls and other restrictions really are a massive blow to “ CCP’s science and technologies ambitions. ” He  continued :

Long tale short, every advanced node semiconductor company is currently facing comprehensive supply cut-off, resignations from all American staff members, and immediate operations paralysis.

This is what annihilation looks like: China’s semiconductor manufacturing industry was reduced to zero immediately. Complete collapse. No possibility of survival.

The Biden administration’s technological decoupling appears to be striking China’s bottom line. This escalation could hinder the state’s rise as a great power. Why? Because it could have much more significant economic impacts than the word “ semiconductor. ”  

These advanced chips are used within fifth-generation fighter jets, hypersonic missile development, stealth drones, nuclear weapons, and all other sorts of intelligent war machines and might undercut China’s goal associated with dominating global artificial intelligence by the end of the decade. In the mean time, this gives the US some time using the $52 billion CHIPS Work Congress recently passed to rebuild the domestic semiconductor industry and spur creativity.  

The far east still has to deliver a reply to the new US actions. What that may be is a large question. The second question is if Biden’s gamble will work. Or, like anything the Biden administration touches, it entirely backfires…  

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