In order to hinder the development of Chinese chips, the United States has introduced various bans for several years, even at the expense of its own interests. But now, the chip ban policy in the United States seems to be hurting itself now.
A large number of American chips are rotting in warehouses, and tens of billions of dollars of chip factory construction plans have also been postponed. The U.S. chip industry is experiencing an unprecedented winter, and all of this stems from America's own bad decisions.
1. The U.S. chip ban has been in the making for a long time
Chips are the food of modern industry, and this is not true at all! Chips are the "heart" of all kinds of high-tech products. Without them, you can't play with your phone, computer, car, or anything.
Therefore, whoever can master the cutting-edge technology of chips will be able to take the lead in this era when technology is king.
The Americans preemptively sought ways to restrict China's access to the latest chip technology. Therefore, since 2019, the U.S. government has repeatedly introduced various export control measures, just to not let China easily get the "unique secrets" of American chips.
Among them, the biggest headache for China is that the United States has cut off Huawei's "chip food". Without the advanced chips of the United States, Huawei's mobile phones and base stations, it is not necessary to take a break? This move can be said to hit the nail on the head!
This series of export controls by the United States is not a whim. They came prepared for it. From Trump to Biden, although the presidents of the United States have changed, they are like-minded and consistent in this matter.
In October 2022, the U.S. Department of Commerce introduced stricter control measures, and China's semiconductor industry was suddenly in mourning. This is a temporary difficulty, and the impact may last for a long time.
The United States is not satisfied with this, and has begun to restrict investment in China again. President Biden personally signed an order in August 2023 to impose restrictions on Chinese investment in sensitive areas such as semiconductors, quantum information, and artificial intelligence. The U.S. Treasury Department is also figuring out ways to block China's development in these areas.
The U.S. government has made a lot of noise and said that it is all for the sake of national security. They believe that the Chinese government is engaged in some kind of "military-civilian integration", wants to convert civilian technology into military use, and also carries the label of human rights violation. Anyway, it's to drag China down!
Now, the relationship between the United States and China has become more tense. American chip companies are also hurting, but they are making a lot of money in China. America's allies are also torn apart, after all, everyone has business dealings with China.
But the U.S. government is determined to control it, and the Secretary of Commerce has said that it will be controlled for five or six years. This chip battle really can't end in three or five years.
However, in the end, the United States still smashed itself on the head.
The first thing is that the orders have been greatly reduced, and the last second is still in the clouds, and the next second it will fall directly to the bottom. Inventories are piling up higher than mountains, and profits are plummeting.
The chip bigwigs in the United States have not escaped this catastrophe. Let's talk about Intel, the giants also have the troubles of the giants. Its plan to invest $20 billion in Ohio to build a factory had to be postponed because of the delay in receiving subsidies from the U.S. government. Waiting for government relief is harder than waiting for pie in the sky.
The CEO of Micron Technology also cried that the market is experiencing imbalances. A balance, with chips on one side and demand on the other, should have been balanced, but now it is unbalanced.
The chip ban in the United States has also turned the otherwise orderly global supply chain into a pot of porridge. Chip companies, suppliers, and downstream customers are all coerced into it, and they are at a loss.
This ban has profoundly changed the global chip supply and demand pattern, and the supply imbalance in 2024 is likely to continue. After the earthquake, there are many aftershocks, and the aftermath is unpredictable, and no one can say for sure.
The U.S. chip ban has also sparked dissatisfaction among allies. The United States has asked allies to cooperate with the chip ban and export controls to China, but this has harmed the interests of allied companies.
Companies such as Asmail in the Netherlands and Weili Science and Technology in Tokyo, Japan, have been affected by the US ban, and they have complained about the US approach.
The United States has undoubtedly had a negative impact on its international image and credibility by insisting on its own interests while ignoring the feelings of its allies.
U.S. companies are reaping the consequences, the global supply chain is in disarray, and the outlook for the chip industry is full of uncertainty. In this chip war, there is no winner, only chicken feathers all over the ground. The hegemonic behavior of the United States is destined to harm others and itself, and ultimately hurt the foundation of global scientific and technological innovation.
The U.S. chip ban has spurred China to accelerate the pace of independence and control
The purpose of the U.S. chip ban on China is nothing more than to curb the development of China's chip industry and maintain its leading position in the global chip field. But this wishful thinking is probably going to come to naught.
As the saying goes, if you lose your horse, you don't know if you are blessed. Under the pressure of the United States, instead of retreating, China has worked hard, accelerated the pace of independent and controllable chip industry, and made up its mind to develop its own chip technology and industrial chain. The stronger the wind and rain, the more we have to rush forward!
The Chinese government has long seen through the tricks of the United States, and immediately formulated a series of support policies, invested hundreds of billions of dollars in real money, and vigorously supported the development of local chip companies, which undoubtedly reassured the chip industry.
Stimulated by favorable policies and market demand, China's chip industry has sprung up like mushrooms after a rain, and a large number of powerful local chip companies have emerged, such as Yangtze River Storage, Huawei HiSilicon, etc., which are accelerating to catch up with the international advanced level and vowing to fill the market gap left by the US ban.
At the same time, Chinese companies themselves are not idle, and have accelerated the construction of their own chip supply chain system, saying goodbye to the "stuck neck" behavior of the United States.
For example, in the fields of lithography machines, chip manufacturing equipment, and electronic materials, China has made a series of major breakthroughs and is gradually moving away from its dependence on American and European suppliers.
We already have some products that we can do in chip design. Let's talk about Huawei HiSilicon's Kirin chip, which is a real cow, and it will not fall behind when it breaks with Qualcomm's Snapdragon chip.
There is also the RISC-V architecture CPU chip engaged in by Zhongtian Micro, which is also the darling of the market. We can finally tie our own shoes, and we don't have to be controlled by others anymore. In this way, the day is just around the corner when China will break the technological blockade of the United States.
At that time, American companies may not even be able to enter the door of the Chinese market, and can only look at the "core" and sigh, watching Chinese companies flourish in the global market, but they can only shout a word of "core sour".
But to be honest, in chip manufacturing, there is still a big gap between us and the international bigwigs. Everyone is playing 5 nanometers, but our most advanced is still 14 nanometers.
However, our company is also trying to catch up, increase investment, introduce equipment, and optimize the process, which is to run all the way on this road.
SMIC is a good example, it has already started mass production of 14-nanometer chips, and has also made a military order to complete the 7-nanometer process in 2025. Not to be outdone, YMTC has done its best in the field of 3D NAND flash memory chips, and it has to overtake in corners.
Of course, the chip is independent and controllable, and it must have the full support of the national team. Our government knows it well and is transfusing blood into the chip industry from all aspects.
For example, the establishment of a national integrated circuit industry investment fund has reassured chip enterprises, the introduction of a series of preferential tax policies to reduce the burden on enterprises, and the implementation of the "Thousand Talents Plan" and other talent introduction plans to provide high-end talents to the chip industry.
With the joint efforts of the government and enterprises, China's chip industry is accelerating and striding towards the goal of independence and control. The U.S. chip ban has not only failed to curb China's footsteps, but has become a shot in the arm and stimulated the fighting spirit and enthusiasm of Chinese chip people.
The U.S. chip ban has brought hidden concerns to the global economy
Chips, a seemingly inconspicuous gadget, are the pillars of the modern economy. But now, the United States has to break ground on these lighthouses and engage in a chip ban, which is simply a stab in the heart of the global economy!
The United States is the leading actor, China is the supporting role, but the victim is everyone in the global chip industry chain. The United States' move directly led to the rupture of the global chip supply chain, and downstream companies have been crying bitterly, either because of the lack of core and materials, or for three days of fishing and two days of drying nets.
The prices of mobile phones and computers, which are essential to everyone's daily life, are rising, inflationary pressure is huge, and consumers' wallets are almost unable to hold it. Does this make people live a good life?
What's worse is that this chip war has also intensified the geopolitical confrontation between China and the United States and even the world. In this era of economic globalization, no one can do without anyone.
The United States is destined to shoot itself in the foot by engaging in unilateralism. No, the stock prices of chip giants such as Qualcomm, Intel, and Nvidia in the United States have fallen sharply, and their financial reports are miserable. Chip companies in Europe, Japan, South Korea and other countries have also suffered. This chip crisis affects the whole body!
International bigwigs such as the International Monetary Fund and the World Bank could not sit still and sounded the alarm bells, warning that the US chip ban could trigger a global recession.
The epidemic has already hurt the vitality of the global economy, and inflation is frighteningly high, and now it is really worse to make the global industrial chain even more precarious.
As a superpower, it is time for the United States to take responsibility. Instead of a chip ban, it is better to join hands with China and other countries around the world to find a way to tide over the difficulties.
Therefore, I would like to advise the United States to stop it and stop doing any more chip bans. Back to the track of win-win cooperation, let's make the cake bigger together, this is the right way. Otherwise, this chip war will only be a farce, and in the end, it will be the well-being of all mankind that will be hurt.
epilogue
The chip ban in the United States is shooting itself in the foot, injuring 1,000 enemies and 800 self-inflicted. U.S. companies are suffering from losing the Chinese market, while Chinese companies are growing in adversity. In the future, the chip hegemony of the United States may be unsustainable, and the rise of China's chip industry has a long way to go.
In the face of major changes unseen in a century, the United States should put aside its prejudices against China, strengthen cooperation, and jointly address the common challenges facing human society.