raimondo questions us chip export controls on china
Washington D.C., Saturday, 28 December 2024.
Outgoing US Commerce Secretary Gina Raimondo has criticized efforts to limit China’s access to advanced semiconductors, labeling them as ‘fool’s errands.’ Her remarks come amid ongoing tensions over semiconductor technology between the US and China. Raimondo emphasized that export controls are mere ‘speed bumps’ and suggested that staying ahead of China technologically is the only viable strategy. The US CHIPS and Science Act, which Raimondo cites, allocates $52.7 billion to boost domestic semiconductor production. Despite these efforts, China continues to explore alternatives like open-source RISC-V architecture to overcome restrictions. Raimondo’s comments highlight the challenges faced by US policy-makers in balancing national security concerns with economic interests. This stance raises questions about the long-term effectiveness of current US policies on global semiconductor players like ASML and TSMC, who are pivotal in the chip supply chain.
Market impact and industry response
The semiconductor industry has shown mixed reactions to Raimondo’s statements. The US share of global chip manufacturing is projected to increase from 10% in 2022 to 14% by 2032 through CHIPS Act initiatives [1]. The Commerce Department has already allocated $42.4 billion in grants and loans for 40 semiconductor projects across 21 states [1]. Recently, an additional $4.7 billion was awarded to Samsung Electronics, bringing total CHIPS Act funding to over $47 billion [1]. These investments represent what President Biden describes as ‘the most significant investment in America since the New Deal’ [1].
China’s technological advancement
Despite export restrictions, China has demonstrated resilience in its semiconductor sector. Chinese engineers are actively exploring alternatives, including open-source RISC-V architecture and chiplet technology to circumvent restrictions [1]. Former ASML CEO Peter Wennick noted that while Chinese companies currently lack access to advanced machinery, they will eventually develop their own capabilities [1]. This assessment aligns with China’s substantial semiconductor exports, reaching $128 billion in the first ten months of 2024 [3].
Strategic implications
The effectiveness of US export controls faces growing scrutiny. Despite tight restrictions, Reuters reports that Chinese universities and research institutes have managed to acquire banned Nvidia chips through resellers [2]. In response to US measures, China has implemented retaliatory actions, including bans on exports of critical minerals like gallium and germanium to the US [3]. These materials are essential for semiconductor production, with China controlling 98% of global gallium production and 60% of germanium supplies [3].