China has redoubled its efforts to become self-sufficient in the production of chips.
Ng Han Guan/Presse Associée
The technological war between the United States and China is likely to continue under the Biden administration, even though the modest remarks made may hide a deep bitterness.
The Huawei saga, in which the US is accused of circumventing sanctions, industrial espionage and potential security threats, has been a central theme in the rivalries between the US and China in recent years. The Trump administration restricted a Chinese telecommunications equipment company’s access to chips made with American technology. And because of the US dominance of semiconductor hardware and design tools, it is now virtually impossible for Huawei to get hold of chips. The United States has also introduced export controls on
International semiconductor company.
China’s domestic alternative to Taiwan Semiconductor Manufacturing Company, the world’s largest chip foundry by market share.
This decline in US technological superiority has highlighted China’s vulnerability in semiconductors and the country has reacted with renewed determination to become self-sufficient in chip production. It has already invested billions of dollars in the semiconductor industry and recruits top engineers from other countries. According to the industry association SEMI, China was the world’s largest semiconductor market in the third quarter with sales of $5.62 billion, up 63% from the previous year.
Technological tensions are unlikely to disappear under the new government. The direct approach of the Trump administration managed to bring Huawei to its knees and even non-US companies were forced to adhere to draconian restrictions. In the long term, however, such a strategy could weaken US high-tech companies which, while monitoring the Chinese market, could reconsider their sources of supply from the United States or carry out research or activities there.
A targeted approach with U.S. allies such as Taiwan and South Korea, which are the major semiconductor manufacturers, with the narrower goal of keeping the most advanced technology away from China, may be more advantageous for the new government. Allocating additional resources to strengthen the R&D and production capacities of the United States and its allies could make it even more difficult for China to catch up. Support for the construction of the houseboat is also aimed at the President-elect.
Joe Biden’s house
Promise to increase national production.
There may be less fire and anger, but the technical rivalry between the two superpowers will probably not disappear.
The technological battle between the United States and China has defeated TikTok and Huawei and affected American companies that produce and sell products in China. WSJ explains how Beijing is putting money into high-tech chips to become self-sufficient. Video/illustration : George Downs/Wall Street Journal
Email Jackie Wong at JACKY.WONG@wsj.com.
Copyright ©2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
Published on 15 December 2020 in a printed publication entitled The U.S.-China Technology War Will Not End After All.
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