The amount of sanctions the United States imposes on China apparently has no limit. This week, the paid global tech industry reporting website The Information reveals that Washington bureaucrats are drawing up a plan to further limit Chinese access to chips and processors.
Although it has a fabulous tech industry, China is not self-sufficient in processor manufacturing. In fact, no country in the world is. Major chip producers such as the Americans, South Koreans and Japanese do so by exchanging technologies with each other.
The way the semiconductor industry has developed forces any manufacturer to license patents and buy technologies from third parties.
In the case of China, as the country’s economic growth challenges American hegemony, the United States has been trying, since the Obama administration, to limit Chinese access to advanced technologies.
For this, the restrictions are not only applied to exports originating in the United States, but also to any company in the world that uses a patent created by an American company. That is, all.
An example of this is the restriction Washington imposed on ASML, a Dutch company that produces UV lithography machines. ASML equipment is 99% European, but at some point, they make use of certain American components… Bingo! A reason was found to ban their exports to some Chinese companies.
The same goes for items from Japanese and Korean companies, which at some point have a partnership with Americans.
Officially, the American speech is not against “the country China”, but against one or another Chinese company, accused of contributing to espionage, disrespecting human rights or other similar arguments.
Occasionally, it is possible that “banned” companies violate international rules and conventions, but obviously this is just an American pretext to limit Chinese access to more technology.
Indeed, the United States consumes Saudi oil, Israeli weapons and minerals from African countries that face far more abuse allegations than China.
It’s like a rich boy who wants to stop his poorest competitor from gaining access to the best boots and thereby increase his chances of winning the game.
In the case of the Dutch ASML machines, they are essential for the production of chips of seven nanometers or less, architectures that SMIC, a Chinese chip company, cannot produce alone.
In all, China has four major chipmakers, and all are to some extent dependent on foreign technology.
Paradoxically, China’s “main ally” is precisely American companies, which are not so concerned with the patriotic defense of their country —or the supposed protection of human rights in China—, but are eager to maintain their access to the multibillion-dollar Chinese market.
The new wave of sanctions should delay (a little) China’s rise, but in the long run it will only force the country to become fully independent of American inputs.
The biggest loser in this tech war, for now, is the consumer —American, Brazilian or Chinese— who will pay more for a cell phone or any smart gadget, whether made in China or made in the USA.