us chip ban faces chinese workaround

2025-04-01 general

Beijing, Tuesday, 1 April 2025.
despite increasing us restrictions, china is finding ways to access advanced chips. chinese tech companies are using methods like smuggling and exploiting legal loopholes. a student was even paid $100 per chip to smuggle them from singapore. us authorities are investigating starcore for using shell companies to acquire restricted chips. one analyst noted gray market prices have tripled since the bans. this impacts the effectiveness of export controls relevant to nvidia, asml and tsmc.

clandestine methods

Despite increasing US restrictions, China is finding ways to access advanced chips. Chinese tech companies are using methods like smuggling and exploiting legal loopholes [1]. A student was even paid $100 per chip to smuggle them from Singapore [1]. US authorities are investigating StarCore for using shell companies to acquire restricted chips [3]. One analyst noted gray market prices have tripled since the bans [3]. This impacts the effectiveness of export controls relevant to Nvidia, ASML and TSMC [1].

impact on chipmakers

The circumvention of US chip bans poses a complex challenge for semiconductor companies. Companies like Nvidia, ASML, and TSMC face potential impacts on their revenue streams and market share [1]. The ability of Chinese firms to access advanced chips through alternative channels could reduce the demand for direct exports from these companies [1]. Moreover, the need for stricter enforcement and compliance measures may increase operational costs for these firms [3].

government responses

The US government is responding to these challenges with increased scrutiny and stricter regulations. On March 24, 2025, the Trump administration added 80 mostly Chinese companies to a list barring them from acquiring US technology [1]. The Biden administration had previously implemented broader restrictions on exporting advanced chips and chipmaking equipment to China [1]. These measures aim to prevent China from developing high-performance computing capabilities for military use [1]. However, experts acknowledge that export controls are inherently ‘leaky instruments’ [1].

long-term strategies

To counter China’s advancements, the US is also focused on strengthening its domestic chip manufacturing capabilities. The CHIPS and Science Act, signed in 2022, provides funding to reshore manufacturing [2]. The US aims to control almost 30% of global wafer fabrication capacity for chips below 10nm by 2032 [2]. However, Donald Trump is attempting to roll back the CHIPS Act, describing it as ‘a waste of money’ [2]. These policy shifts introduce uncertainty into the long-term outlook for the semiconductor industry [2].

talent acquisition

Adding another layer of complexity, Chinese tech companies are actively recruiting talent from rival nations to bolster their domestic capabilities [7]. Taiwan’s Investigation Bureau is probing 11 Chinese companies suspected of using disguised entities to lure tech talent from companies like Intel and Microsoft [7]. Semiconductor Manufacturing International Corporation (SMIC), China’s largest chipmaker, is among those accused of establishing a presence in Taiwan via a Samoan company to hire local experts [7]. This talent acquisition strategy poses a direct challenge to the technological dominance of established chipmakers [7].

Bronnen

china export bans