The escalating tech rivalry between the United States and China has reached new heights this week, as the US imposed stringent new export controls on semiconductor technology, prompting swift retaliatory measures from China.
US Tightens Semiconductor Export Restrictions
The US Department of Commerce’s Bureau of Industry and Security (BIS) announced significant updates to its export controls, specifically targeting China’s semiconductor manufacturing capabilities. These restrictions encompass 24 types of semiconductor manufacturing equipment, three categories of software tools essential for chip production, and High-Bandwidth Memory (HBM) – a critical component in AI chip technology.
The updated controls also added 140 entities to the US Entity List, of which 136 are Chinese. Companies listed face severe hurdles in acquiring US technology, as they require a specialised export licence that is rarely granted. The newly added entities include semiconductor fabrication plants, tool manufacturers, and investment firms allegedly linked to the Chinese government.
According to the BIS, these measures aim to hinder China’s ability to domestically produce advanced-node integrated circuits, a cornerstone for AI and military applications. “They’re the strongest controls ever enacted by the US to degrade the PRC’s ability to make the most advanced chips that they’re using in their military modernization,” said Secretary of Commerce Gina Raimondo.
China Strikes Back
China wasted no time responding to the US sanctions, imposing its own export bans on several critical materials essential for semiconductor and military applications. The banned items include gallium, germanium, antimony, and superhard materials, with stricter controls also introduced for graphite products.
In a statement, China’s Commerce Ministry condemned the US actions, calling them a form of “unilateral bullying” and accusing Washington of abusing national security provisions. “The US preaches one thing while practising another, excessively broadening the concept of national security and abusing export control measures. China firmly opposes such actions,” the ministry said.
The Chinese sanctions, effective immediately, highlight the growing tensions in the global semiconductor supply chain and the geopolitical struggle for technology dominance.
Broader Implications
This latest trade confrontation underscores the intensifying efforts by both nations to secure leadership in semiconductor production. Both the US and China have launched multibillion-dollar state subsidies to bolster domestic chip manufacturing and reduce reliance on global supply chains.
The restrictions also reflect the US’s concern over China’s increasing advancements in AI and military technologies. For China, the sanctions on key materials further highlight the vulnerability of its supply chain to external pressures.
Intel CEO Retirement Adds to Industry Shakeup
Amid the geopolitical showdown, the semiconductor industry was hit by the unexpected news of Intel CEO Patrick Gelsinger’s retirement.
Intel has faced significant challenges in recent years, struggling to compete with Taiwan Semiconductor Manufacturing Company (TSMC) and AMD. Despite extensive internal restructuring and a workforce reduction of 15,000 employees, Intel reported a $1.6 billion loss in its latest quarterly report.
As the US and China vie for technological supremacy, the global semiconductor industry finds itself at the centre of a high-stakes competition, with ripple effects likely to impact innovation, supply chains, and international relations for years to come.
