trump administration escalates chip war with china, presses allies for support

2025-02-26 general

Washington, Wednesday, 26 February 2025.
the trump administration is planning more stringent export controls on semiconductor technology to china, pushing japan and the netherlands to align with us restrictions. officials are reportedly asking allies to cease providing maintenance for chip-making equipment already sold to china. these expanded restrictions could impact asml’s euv lithography system sales and nvidia’s chip exports, prompting beijing to condemn washington’s actions as malicious suppression.

impact on semiconductor companies

The move has significant implications for semiconductor companies [1][2]. ASML, a dutch lithography giant, could face curtailed revenue streams if it’s unable to service or sell its high-end EUV systems to chinese firms [1][2]. Similarly, nvidia, which has already faced restrictions on ai chip exports to china, may see further limitations on the types and quantities of chips it can sell without licenses [1]. These restrictions align with the us government’s broader goal of preventing china from advancing its domestic semiconductor industry and strengthening its ai and military capabilities [2].

ally compliance and market dynamics

The effectiveness of these controls hinges on the cooperation of key allies like japan and the netherlands [1]. These countries are home to critical equipment manufacturers like tokyo electron and asml [1][2]. Securing their commitment to halt maintenance and restrict exports is crucial for the us to achieve its objectives [1]. However, it remains uncertain whether these allies will fully align with the trump administration’s policies [1]. Previous attempts by the biden administration to reach agreements with these nations faced resistance, highlighting the complexities of multilateral cooperation in this area [1].

china’s response and potential retaliation

Beijing has condemned the us actions, characterizing them as a “malicious suppression” of its semiconductor industry [1][3][6]. China’s foreign ministry has accused the us of politicizing and weaponizing economic and technological issues [3][4][6]. They argue that these restrictions impede the development of the global semiconductor industry and will ultimately harm the us itself [3][6]. In response, china may take measures to protect its companies and interests, potentially escalating trade tensions and further disrupting the global supply chain [3][4]. This could include increased investment in domestic chip production or retaliatory measures against us companies [alert! ‘this is speculation based on past events’].

investor considerations

Investors should closely monitor the developments in this escalating chip war [GPT]. Companies like asml, nvidia, lam research, kla, and applied materials are directly exposed to policy changes [1][2]. Stock valuations may fluctuate based on announcements of new restrictions, ally compliance, and china’s retaliatory actions [alert! ‘stock values are volatile and can depend on many factors’]. Furthermore, the long-term impact on the global semiconductor industry remains uncertain [5][7]. Investors need to assess the potential for supply chain disruptions, shifts in market share, and the overall impact on technological innovation [5][7].

expert opinions and industry concerns

Industry experts have expressed concerns about the potential consequences of these escalating restrictions [7]. Some argue that they could backfire, encouraging china to accelerate its efforts to achieve self-sufficiency in chip production [2][7]. Others warn that the restrictions could harm us companies, limiting their access to the chinese market and undermining their competitiveness [7]. The semiconductor industry association has previously criticized similar measures, calling them “the most damaging blow” to the us tech sector [7]. Nvidia’s ceo has also voiced concerns that restrictions strengthen china’s resolve for technological independence [7].

Bronnen

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