The Biden administration is considering further tightening technology export controls on China’s artificial intelligence chip industry. Although the development of China’s advanced semiconductor chip technology has encountered a bottleneck that is difficult to break through under the restrictions of the US export ban, with the support of government financial subsidies, China’s low-end chip production capacity has increased instead of falling. The United States and Europe are worried that with the support of non-market means, traditional chips made in China will be dumped overseas.
Members of Congress urge White House to increase sanctions to cut off China’s continued access to high-end US chips
Republican Rep. Mike Gallagher, chairman of the U.S. House of Representatives Ad Hoc Committee on Strategic Competition with the Chinese Communist Party, and Democratic Rep. Raja Krishnamoorthi, the committee’s ranking member At the end of last month , he sent a letter to US Secretary of Commerce Raimondo, calling on the US government to further strengthen export controls on China in order to cut off China’s access to high-end artificial intelligence chips produced by US companies such as Nvidia, AMD and Intel.
The current US export control regulations prohibit the export of advanced chips and chip production equipment to Chinese chip manufacturers: chips with a transmission rate of more than 600GB per second cannot be exported to China.
In response to this regulatory requirement, Nvidia quickly ordered the A800 chip for the Chinese market, with a data transmission rate of 400GB per second, replacing the company’s higher-end A100 chip with a rate of 600GB per second. The company said the A800 is capable of meeting the technical requirements required for the development of artificial intelligence systems.
Other U.S. chip companies are also pinning their hopes on the business opportunities brought about by the recovery of industries such as computers, servers, and 5G communications in the Chinese market, and have followed Nvidia’s practice of “tailor-made” chips for the Chinese market.
Intel Corporation announced in July this year that it has customized the Gaudi2 chip for AI deep learning research and development for the Chinese market. AMD also revealed on August 1 that it is considering following the example of Nvidia and adjusting the product specifications of AI chips. The industry expects that AMD may adjust the speed of its latest MI300 artificial intelligence chip, and its old MI250 chip production may also be directly exported to the Chinese market to comply with US export control requirements. .
Gallagher and Krishna Morthy said in the letter that the transmission rate requirements of the U.S. export ban should be further lowered to prevent Chinese companies from using “clever engineering” to avoid the ban. The impact of smart technology development.
Reuters reported in June this year that the Biden administration in the United States was considering further restricting the export of chip technology to China and extending the applicable standards of the ban beyond chip speed. However, the Biden administration’s plan has been opposed by US chip giants. Nvidia said that this will “lead to the permanent loss of opportunities for the US industry (in the Chinese market).”
The three major U.S. chip giants—Intel, Nvidia, and Qualcomm—sent company executives to lobby U.S. government officials and lawmakers in Washington in July in an attempt to get Biden to abandon new restrictions on chip exports to China.
Stephen Ezell, vice president of global innovation policy research at the Information Technology and Innovation Foundation (Information Technology and Innovation Foundation), told VOA that there may be changes to the Biden administration’s chip export controls.
“Semiconductor is a highly innovative and dynamic industry, with new technologies and chip architectures constantly emerging,” he said. evolution.”
China’s “low-end” breakthrough? The United States and Europe are worried that China’s subsidy of low-end chip industry will lead to international dumping
However, neither the Biden administration nor the US Congress has ignored a new problem. The export control measures introduced by the United States in October last year greatly hindered China’s development of advanced chip manufacturing capabilities, but did not touch China’s ability to acquire chip technology above 14 nanometers. There are signs that Chinese companies are accelerating the development of mature chips (that is, traditional chips).
The smaller the chip size and the higher the integration level, the more advanced the manufacturing process. Mature process chips, generally referring to chips manufactured using 28nm or lower technology levels, have a history of more than ten years ago. Such chips are widely used in smartphones, electric vehicles, military hardware and other fields, and are indispensable in the global market.
According to data from China Optical Communications Network, China’s domestic chip production in June was 32.15 billion, a year-on-year increase of 5.7%. Since March, it has achieved growth for four consecutive months, and the growth rate has accelerated significantly. These domestic chips are mainly based on mature technology. , 28nm and above mature process chips accounted for more than 70%.
“This is a low-margin, high-volume business.” Brian Tycangco, an analyst at Stansberry Research, an American investment research firm, told VOA.
“The increase in mature node chip production is to address the recent chip shortage that has disrupted global manufacturing supply chains,” Zheng said. “This low-end, mature node is an area that more advanced countries such as Taiwan and Japan are no longer focusing on. There’s also no commensurate economy of scale to produce it.”
U.S. Commerce Secretary Gina Raimondo warned at a discussion at the American Enterprise Institute think tank on July 26: “China spends a lot of money on subsidies, mature chips and traditional chips. There will be excess capacity, which is something we need to think about and work with our allies to solve.”
Bloomberg recently cited forecast data from industry organization SEMI as saying that by 2026, China will build 26 fabs for 200mm and 300mm wafers, far ahead of the rest of the world. At that time, the Americas and Europe each have only 16 such fabs.
At the same time, on China’s domestic stock market, chipmakers with traditional manufacturing processes are highly sought after. Hua Hong Semiconductor, the leading wafer foundry in China, was listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange on August 7, raising a total of 21.2 billion yuan, making it the largest A-share IPO (initial public offering) in China this year It is the third largest IPO in terms of funds raised since the board opened. Hua Hong Semiconductor’s manufacturing process is mainly based on mature processes.
In terms of chip manufacturing technology, the Chinese media “Securities Daily” reported on July 31 that Shanghai Microelectronics has made a breakthrough in the research and development of the 28nm “immersion lithography machine” and is expected to deliver the first domestically produced SSA by the end of this year. /800-10W lithography machine equipment. According to the report, at present, Shanghai Microelectronics has mass-produced SSX600 series lithography machines with a resolution of 90 nanometers, and lithography machines with a resolution of 28 nanometers are also expected to make a breakthrough.
Analysts, however, are skeptical. Douglas Fuller, an associate professor at the Department of International Economics, Government and Business at Copenhagen Business School, told VOA that Shanghai Microelectronics has always released news about “technical breakthroughs”, but there is a precedent for that.
“(Shanghai Microelectronics) has not achieved mass production of lithography equipment so far. I will remain skeptical until I see large-scale production using Shanghai Microelectronics lithography equipment,” he said.
The global lithography machine industry is monopolized by Dutch and Japanese companies. Among them, the Dutch ASML technology is the most advanced, and it is the only manufacturer that can produce extreme ultraviolet lithography machines, which can realize 7nm or even 5nm processes.
Expert: The possibility of China dumping chips is a legitimate concern
Experts say the U.S. and European countries are right to be concerned about China dumping traditional chips, given the precedent of China’s previous bad trade practices.
Bloomberg quoted a senior official of the Biden administration as saying that although there is no timetable for taking action against China and it is still in the information gathering stage, all options are on the table.
James Lewis, Director of the Strategic Science and Technology Program at the Center for Strategic and International Studies (CSIS), told Voice of America that if China abides by trade rules, international semiconductor companies in the United States, Japan, Europe and other countries are not worried about developing a mature process with China. Competition in the chip field.
He said that the practice of dumping chips is a huge “temptation” for China: “We have not yet figured out how to integrate China’s non-market economy into the world. Overcapacity is a real problem in China’s industrial policy.”
Stephen Ezell, vice president of global innovation policy research at the Information Technology and Innovation Foundation, said China hopes to adopt a similar strategy to dumping solar panels when it comes to mature chips. Harm the economic interests of those competitors based on the principles of market economy.
He told VOA: “Since China’s chip production strategy is based on government output targets and other non-market-driven strategic goals, at some point there is a high probability that there will be an oversupply of mature node chips or memory chips, which will Depressing global market prices.”
“That’s why it’s important for like-minded countries to insist that China abide by its WTO commitments to compete in advanced technology industries on private-sector-led, market-based, rules-governed terms,” he said.
CSIS’ Lewis said trade officials could discuss how to deal with the possibility of Chinese chip dumping at the upcoming meeting of G7 trade ministers in October this year.
European countries are particularly worried about the possible dependence on China for traditional process chips. “Many automakers have started to invest in in-house (chip) capacity, but this puts a burden on the cost structure compared to using external fabs,” said Fu Doug of Copenhagen Business School. To avoid dependence on China, foreign The government can subsidize these traditional node chips domestically, or they can impose tariffs.”
Both the U.S. and Europe are trying to expand chip production to reduce their reliance on Asia. The U.S. government allocated $52 billion for the 2022 Chip and Science Act (Chip Act), but it will focus on the production of advanced process chips and ignore the traditional process areas.