Editor-DN
US China Chip War Graphic
Wong Yu Liang | moment Getty Images
China remains an essential market for most U.S. chipmakers, despite Washington’s efforts to limit chip sales in the country and Beijing’s push for self-sufficiency in the semiconductor sector.
Data from S&P Global It has been shown that American chip giants Intel, Broadcom, Qualcomm And Marvell Technology All generate more revenue from China than from the US.
The US has approved a series of export controls starting in October 2022 aimed at limiting China’s access to advanced chip technology, particularly those used in AI applications.
“China is an important market for US chipmakers, and US restrictions on selling advanced AI chips to China are specifically designed to prevent most US firms from selling most types of chips to Chinese consumers. be allowed,” Chris Miller, author of “Chip War.” told CNBC.
Used in a wide range of products from smartphones to electric vehicles, semiconductors have become a top priority for governments worldwide.
According to data from tech consultancy Omdia, China consumes about 50 percent of the world’s semiconductors as it is the largest market for assembling consumer devices.
U.S. chipmakers, which enjoy a technological lead over Chinese rivals, have been able to meet demand because U.S. export restrictions focus on certain products.
“There are still a lot of ‘high-end’ chips with allowable use cases that are good to go where US-based chip companies are dominant, leading the way,” said William B. Bailey, lead technology, media and telecommunications analyst. ” In Nasdaq IR Intelligence.
Navigating export restrictions
US chipmakers, even those with the majority of business in the US, eg Micron Technology, AMDAnd Nvidiahas tried to serve its Chinese customers despite export controls.
When the first wave of US sanctions took effect in late 2022, Nvidia and Intel designed modified versions of AI chip products for the Chinese market.
A year later, the US updated export laws to address these loopholes. But, soon, it was reported that Nvidia is working on a new chip made for China.
Intel reportedly continues to sell millions of dollars worth of laptop processor chips to US-approved Chinese telecom giant Huawei thanks to an export license issued by the Donald Trump administration.
The company did not respond to a request for comment on its plans for the China market.
AMD has also designed an AI chip for China but will need to apply for an export license after failing to get through to US regulators last month.
Executives from Intel, Qualcomm, and Nvidia had. Allegedly He was part of a group that planned to lobby Washington against tougher chip restrictions in July last year.
These companies are also members of the Semiconductor Industry Association, the largest American semiconductor trade organization, which issued a statement At the same time, the importance of the Chinese market to domestic chip companies has eased tensions and called for further sanctions.
Amid a tougher policy stance from the US, China has also responded in kind. In May last year, chips made by US Micron were banned from critical information infrastructure in China after failing a review by the country’s Cyberspace Administration.
Micron is building a new assembly and test manufacturing facility at an existing site in Xi’an, China, as the country “remains an important market for Micron and the semiconductor industry,” a company spokesperson told CNBC. Production is estimated to start in the second half of 2025, he said.
Market share concerns
China is seeking self-reliance by building its own domestic semiconductor industry in response to countries such as the United States and the Netherlands restricting its access to advanced technology.
Beijing has given billions of yuan in subsidies to its chip firms to boost domestic manufacturing.
Huawei’s Mate 60 Pro smartphone review by Tech Insights China’s largest chip maker, SMIC, has unveiled an innovative chip. The smartphone is said to be equipped with 5G connectivity – US restrictions are aimed at preventing Huawei from accessing this technology.
Miller said the Chinese government is “more and more focused” on getting its firms to buy locally-made chips. “Unless foreign companies gain a substantial technological edge over domestic Chinese rivals, they will lose market share in China.”
However, Felix Li, an equity analyst at Morningstar, said he does not expect a “supply chain revival” even as Chinese firms innovate on legacy chips found in everything from home appliances to medical devices. can
Legacy chips are typically mature or low-end semiconductors. US Commerce Secretary Gina Raimondo said About 60 percent of these chips are manufactured in China..
According to Brady Wang, associate director of Counterpoint Research, in the AI GPU market segment, US companies such as Nvidia and Intel have a technological lead of about three to five years over Chinese rivals.
“We believe that China can still build its own local GPU supply chain for certain market segments, but the amount will be limited, and the cost will be very high,” he added.
