The News
Chinese firms are stockpiling chip making equipment and building out semiconductor supply chains to guard against further US curbs.
The country imported a record $26 billion worth of such machinery, while ASML — a Dutch firm that makes the world’s most advanced chip lithography devices — reported surging sales to China.
A Washington-based semiconductor trade association, meanwhile, warned that Chinese tech giant Huawei was building a secret set of chip making facilities to evade US sanctions, according to Bloomberg.
Semiconductors have emerged as a key issue in the US-China rivalry, with Washington enlisting allies to restrict Beijing’s access to the most advanced chip technology: A think tank said this week China lags the sector’s global leaders by about five years.
SIGNALS
US mulls tougher rules to slow down China’s AI industry
The Biden administration has been preparing new rules that would limit exports to China of chip making machinery and software that uses US parts, particularly those made by allies such as Japan and Netherland, Bloomberg reported. Some experts believe that US export controls are ultimately forcing Beijing to strengthen its domestic chip making capabilities, which may give it a stronger hand in the long term. “U.S. actions may impede Chinese innovation and growth only in the short term, and thereafter actually speed up its technological advance,” three researchers wrote in Foreign Affairs.
Chinese firms turn to the cloud to get around restrictions
State-linked Chinese firms are using cloud computing services to access high-end chips and AI capabilities that are otherwise not allowed to be exported to China, a Reuters investigation found. Using Amazon Web Services and its competitors remains a legal way for Chinese companies to access cutting-edge American computing power, despite long-standing concerns that this loophole undermines US efforts to limit China’s AI advances. While the US has proposed policies that would make it harder for Chinese entities to access advanced cloud computing, the rules have yet to come into effect.
Semiconductor tensions spill over to other parts of US-China relationship
Tensions over China’s access to semiconductors have started to spill over into other parts of the US-China relationship, complicating efforts to renew a 45-year-old science and technology agreement, the Financial Times reported. The agreement has allowed scientists from both countries to collaborate, leading to valuable research in areas like disease monitoring, climate research, and reducing birth defects. But disagreements about US export controls on semiconductors and fears of potential espionage have made it unclear if the treaty will be renewed before it expires at the end of August. Still, some cooperation on emerging tech remains. Beijing and Washington recently held talks on AI safety, with US officials expressing interest in continuing them.