can china bypass us ai chip export controls?
Hong Kong, Tuesday, 2 September 2025.
despite us restrictions on advanced chips, china’s ai sector is poised for growth. a comprehensive strategy, fueled by significant investment and innovation from companies like huawei, aims to overcome export hurdles. openai ceo sam altman agrees that export controls are not enough to curb china’s ai development. this multifaceted approach may allow china to achieve long-term ai ambitions, challenging the effectiveness of us export controls.
us restrictions and china’s response
The US government has implemented export restrictions to limit China’s access to advanced AI chips and semiconductor manufacturing equipment [1]. These restrictions include revoking licenses for South Korean chipmakers Samsung Electronics and SK Hynix to receive US semiconductor manufacturing equipment in China [1]. These measures aim to slow China’s progress in closing the AI gap, but China is building a self-sustaining ecosystem to overcome these constraints [1]. China emphasizes engineering solutions, mobilizing domestic tech giants like Alibaba and Huawei to develop indigenous AI chips [1].
investment implications for korean chipmakers
South Korean chip stocks are experiencing declines, with Samsung Electronics down 2.3% and SK Hynix falling 4.8% [7]. This decrease is attributed to slower-than-expected export growth and concerns about high chip inventories [7]. August trade data revealed that exports grew by 1.3%, below the anticipated 2.3%, while imports decreased by 4.0%, exceeding the projected 2.5% decline [7]. Analysts suggest that while short-term pressures exist, the long-term competitiveness of the semiconductor industry remains robust [7].
china’s ai advancements and market reactions
Despite US restrictions, certain Chinese companies are seeing positive market movement. Goldman Sachs raised its 12-month target price for AI chip company Cambricon by 14.7% to 2104 yuan (approximately $295 usd) [8]. Alibaba’s Hong Kong-listed shares rose by 18.5% after the company reported significant revenue growth in its cloud computing sector, driven by the AI boom [8]. These instances suggest that domestic innovation and demand are creating opportunities within China’s AI market, despite external pressures [8].
concerns over us chip tracking
Reports indicate that the US government has secretly placed tracking devices in advanced chips potentially being diverted to China [4]. These trackers, often hidden in server packaging, are used to monitor compliance with export controls [4]. This practice has raised concerns about potential security risks and the weaponization of technology [4]. China has expressed its opposition to the US politicizing and using export controls as a tool, stating that such actions disrupt global supply chains and harm all parties involved [5].