Global Tuidang Center



Tech War: US Government to Limit China’s Access to Chip Technology




The Trump administration is reportedly looking to restrict China’s access to American chip-making equipment. The move is specifically targeted at Chinese companies like Huawei, which the U.S. government considers a security threat to the West.

Restricting Chinese access

“To target global chip sales to Huawei, U.S. authorities would alter the Foreign Direct Product Rule, which subjects some foreign-made goods based on U.S. technology or software to U.S. regulations… Under the draft proposal, the U.S. government would force foreign companies that use U.S. chipmaking equipment to seek a U.S. license before supplying Huawei,” according to South China Morning Post.

The new proposal has only been drafted and is a long way from approval. If implemented, it would require companies like Taiwan’s TSMC to get approval from the U.S. prior to selling chips to Huawei. TSMC is the major producer of Huawei’s HiSilicon unit. Such restrictions on-chip supply will also be made on companies like Qualcomm. What the U.S. is trying to do is to ensure that no advanced chip tech goes to Huawei.

Supporters deem the proposal necessary so as to contain Huawei’s global reach. The UK recently cleared Huawei to participate in setting up the 5G network in the country. This will have serious consequences in intelligence sharing between America and Britain. If countries in Europe also open up to Huawei, the West’s intelligence alliance will be in jeopardy.

However, critics point out that banning chip sales to Huawei might dent the relationship between the U.S. and China further. The two countries recently signed a trade deal. There is also a concern that the ban might end up benefiting China as some chip-manufacturers might choose to transfer technology to the Asian nation due to its large market size.

At present, most chip manufacturers rely on equipment manufactured by U.S. companies like Applied Materials, KLA, and Lam Research. “There is no production line in China that uses only equipment made in China, so it is very difficult to make any chipsets without U.S. equipment,” Everbright Securities said in a report (The Epoch Times).

Europe’s tech challenge

Europe recently revealed its plans for turning the region into a leader in artificial intelligence, challenging America and China in the process. The proposal published by the European Commission covers areas like regulation of facial recognition and AI technologies, access to data, supporting European tech, and so on. Currently, Europe is ahead of the U.S. and China in terms of AI talent. However, lack of funding and slow adoption of AI means that the region is still lagging behind the two superpower nations.

“[Europe] can develop an AI ecosystem that brings the benefits of the technology to the whole of European society and economy… In order to address possible societal concerns relating to the use of AI for such purposes in public places… the Commission will launch abroad Europe and debate on the specific circumstances, if any, which might justify such use, and on common safeguards,” states the whitepaper (Business Insider).

One of the aims is to develop a single data market in the region by 2030 that covers personal data, financial data, energy data, health data, and so on. Data sharing between member states, public authorities, and businesses will be encouraged. The policies are expected to enable European tech firms to compete with American giants like Facebook and Google.


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