China (Transatlantic Today)- In a recent statement, US Secretary of Commerce Gina Raimondo expressed China’s huge technology deficit with the United States, particularly in chip production. Raimondo voiced confidence in Huawei’s improvements, indicating that recent data shows Chinese manufacturers lagging behind their American competitors.
The rapid advancement of generative artificial intelligence (AI) has triggered a global technological race to develop computer chips that will power the models. According to specialists inside and outside China, the United States’ embargo on exporting high-quality computer chips to China is hampering the country’s advancement in crucial technologies.
Raimondo claimed on CBS News’ ’60 Minutes’ that export laws are insufficient to observe Huawei’s expansion. She stressed that the United States continues to create the most sophisticated semiconductors worldwide, owing to the robust innovation ecosystem.
Concerns Over Market Access
Despite concerns from US semiconductor makers about prospective market access losses, Raimondo reiterated his commitment to maintaining trade with China in most commodities and services. However, technologies that have a direct influence on national security remain excluded.
National Semiconductor Industry Encouraged
The Science and Chips Law intends to enhance the United States’ national semiconductor industry, which faces competition from countries such as China. Efforts have intensified in response to geopolitical concerns, with ambitions to replace 80% of China’s imported chip production equipment with domestic alternatives by 2024.
China Remains Resilient Despite U.S. Restrictions Despite US sanctions, Chinese semiconductor makers, aided by government initiatives, continue to advance chip production. Government-backed companies such as SMIC and Huawei aspire to achieve self-sufficiency in chip manufacture by 2025.
Acquisition of High-End Chips Amid Restriction
Despite U.S. restrictions, Chinese corporates still keeping high-end chips from Nvidia through third-party suppliers. These chips were integrated into servers manufactured by various companies, signaling resilience in circumventing sanctions.
Challenges Ahead for China’s Semiconductor Industry
According to Nature, Numerous suppliers, including the Taiwan Semiconductor Manufacturing Company (TSMC) based in Hsinchu, refrain from exporting their latest processors to China to comply with U.S. sanctions. “TSMC is limited to manufacturing chips that fall below the threshold set by U.S. regulations,” explains Wang, alluding to the Biden administration’s 300-teraflop restriction. Consequently, China is constrained to develop its high-performance chips domestically.
Huawei’s Resistance Amid Sanctions
Huawei continues to defy US limitations and retains ties with suppliers such as Intel despite poor labor conditions and sanctions. However, industry experts believe that processors and semiconductors’ losses could set China back a decade or more.
With China underperforming in semiconductor technology, the United States still keeping its leading position despite geopolitical challenges. While China make efforts to develop its semiconductor industry, considerable obstacles remain in closing the technology gap with the United States.
A lack of competition in AI may worsen what some refer to as the country’s brain drain. “The broader issue is the economy,” Xiao argues. “Most ambitious Chinese students aspire to study overseas and stay. They’re not thinking about being in China.”
