TECH

Backlash From Key Chinese Industries as U.S. Expands Chip Export Restrictions

Published: Dec. 4, 2024 4:04 a.m. GMT+8

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A silicon wafer etched with chips from an applied materials company in California.

America has come under heavy criticism from China’s semiconductor, internet and automotive industries for expanding the chip export restriction to target another 136 Chinese companies.

The move prompted calls for caution when procuring U.S. chips and warnings that the restrictions could cause significant disruption to global supply chains.

The U.S. Department of Commerce said on Monday that it was adding 140 companies, including 136 Chinese firms, to its “entity list”, effectively banning them from accessing U.S. advanced chip and AI-related technology. The new rules also restrict exports of high-bandwidth memory, a core component for AI development.

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The U.S. has expanded chip export restrictions, targeting 136 Chinese companies to limit China's access to advanced chip and AI technology for national security reasons.
China criticized these actions as economic coercion, responding with export bans on essential materials and urging industries to explore alternatives to U.S. suppliers.
Both American and Chinese industries face potential disruption, with U.S. companies heavily reliant on the Chinese market for significant revenue.

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Who’s Who

Nvidia Corp.: Nvidia Corp. is a dominant provider of AI acceleration chips used in intelligent vehicles and intelligent computing centers. The U.S. export restrictions particularly impact China's automotive and internet sectors, where Nvidia's chips are essential. Despite these restrictions, Nvidia derived 17% of its revenue from China in fiscal 2024, highlighting its significant reliance on the Chinese market.

Qualcomm Inc.: According to the article, Qualcomm Inc. is a major American chipmaker whose products are crucial in China's automotive and internet sectors. It derives nearly half of its revenue from the Chinese market. Qualcomm, along with other U.S. companies like Nvidia and Intel, plays a significant role in supplying advanced chips used in intelligent vehicles and data centers. However, the U.S. export restrictions pose a threat to its business in China.

Intel Corp.: Intel Corp. is a dominant supplier of CPUs for data centers, controlling nearly 90% of the market along with AMD. The U.S. export restrictions on China impact sectors reliant on these chips, like automotive and internet. Intel derives a significant portion of its revenue from China, reporting 27% of its sales from the region in 2023. The trade restrictions pose a threat to Intel's business within the lucrative Chinese market.

Advanced Micro Devices Inc.: Advanced Micro Devices Inc. (AMD) is an American company that dominates the market for AI acceleration chips used in intelligent vehicles and data centers. These chips are a vital technology for AI development and computing. Despite being a leading supplier, AMD is impacted by U.S. export controls that limit China's access to their advanced technology. These restrictions complicate the ability of Chinese industries to find alternative suppliers.

Huawei Technologies Co. Ltd.: Huawei Technologies Co. Ltd. is mentioned as a domestic Chinese company offering alternative AI chips. However, its ecosystem for these chips is still in the early stages of development compared to established American products.

Iluvatar CoreX: Iluvatar CoreX is a domestic Chinese company offering alternative AI chips to American options like those from Nvidia and AMD. However, its ecosystem is still in the early stages of development, limiting its immediate viability as a replacement for widely used U.S. chip products in China.

Marvell Technology Inc.: Marvell Technology Inc. is a U.S. chipmaker heavily reliant on the Chinese market, deriving nearly half of its revenue from China. The escalating trade restrictions threaten to disrupt this lucrative business.

Texas Instruments Inc.: Texas Instruments Inc. reported that 19% of their sales originated from China in 2023. The article highlights the potential impact of escalating U.S. trade restrictions on Texas Instruments, as these restrictions threaten to disrupt their revenue from the lucrative Chinese market.

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What Happened When

Monday, December 2, 2024：: The U.S. Department of Commerce announced that it was adding 140 companies, including 136 Chinese firms, to its 'entity list,' effectively banning them from accessing U.S. advanced chip and AI-related technology.

Tuesday, December 3, 2024：: China responded by banning exports to the U.S. of gallium, germanium, antimony, and other high-tech materials with potential military applications.

AI generated, for reference only