The United States has created new laws that experts will have a major effect on the Chinese chip market which is clearly what the White House is aiming to curb.
Over the last decade, China has invested billions of dollars in their local chip market to ensure that they can be able to reliably create processing chips that are competitive and not rely on foreign suppliers.
They have some way to go but they still lag behind neighbors such as Taiwan, South Korea, and the United States.
Earlier this year, one of China’s major chip manufacturing firms Semiconductor Manufacturing International Corporation (SMIC) created a 7nm(nano-meter) chip, which is a major achievement for China and a worrying sign for Washington that wants to stop China from becoming the global chip maker.
The whole point there is a chip war going on between America and China. It could even be seen as an overall technological war that will evolve over time into other forms of trade which will have an impact on all of us.
One large supplier of chip-making equipment, ASML, told U.S. employees to stop installing or servicing equipment at any Chinese chip factory while it sorts through the new rules. Another equipment provider, Applied Materials, said the export restrictions will prevent it from making sales of roughly $400 million in the fourth quarter.
A major problem that the United States will face is that China has the largest manufacturing base in the world. China has the capacity to produce cheap chips that might not be as effective as others but they can get the job done nonetheless.
What happens if China decides to drive down the price of the Chip market for every manufacturer forcing other top companies to drive down price?
I am hoping that those in the White House have done their due diligence which is a big ask.
The controls basically bar products to China of American-made assembling hardware expected to deliver progressed chips. They likewise bar the commodity of any U.S. instruments or parts to Chinese production lines fit for making very good quality semiconductors.
In an original step that seems to have provoked a few organizations to comprehensively suspend exchange with China, the guidelines likewise bar “U.S. people” — including American manufacturing plants, and Americans and U.S. green-card holders who work in unfamiliar manufacturing plants abroad — from supporting the turn of events or creation of cutting edge contributes China, except if they get a U.S. government permit.
ASML, a Dutch producer of very good quality semiconductor fabricating devices that has U.S. workplaces and numerous U.S. representatives, quickly trained its U.S. staff to freeze their cooperation with Chinese clients.
