(MENAFN- Asia Times) A baffled group of chip industry experts, in a symposium discussion published November 4 by the ChinaTalk newsletter, tried and failed to explain Washington's new export curbs on chip tech to China.
A close reading of the Commerce Department's specifications shows ignorance about the technologies involved and confusion – if not duplicity – about the ban's implications for China's military. The experts' group concluded that the new policy was rushed into effect in panic mode, without weighing its civilian or military implications.
The new export controls“will restrict the People's Republic of China's ability to both purchase and manufacture certain high-end chips used in military applications,” the Commerce Department's Bureau of Industry and Security wrote .
That makes no sense, according to the experts, who included Jay Goldberg of Digits to Dollars, Doug O'Laughlin of Fabricated Knowledge, ChinaTalk's Jordan Schneider and Martin Chorzempa of the Peterson Institute for International Economics. At the laboratory level, they observed, China can make enough advanced chips to power its key weapons systems.
Jay Goldberg: Doug O'Laughlin: Jordan Schneider: In fact, China has had missiles that can destroy US aircraft carriers hundreds of miles from its coast since 2015, as Office of Net Assessment Director Andrew Marshall told me at the time.
The 5-nanometer chips that contain 57 billion transistors in Apple's latest incarnation are powering 5G handsets and Big Data/AI applications, but the computer that guided Apollo 11 to the moon had just 36,000 transistors. Military systems use older chips that China makes at home, according to a 2022 report.
But if China requires the most advanced 5nm chips for AI-driven military applications – for example, drone swarms controlled by a 5G broadband network and guided by artificial intelligence – China can make enough of them, although at high cost.
The US ban won't affect weapons systems, but it will delay China's rollout of autonomous vehicles, data centers and other civilian applications.
Chinese swarm drones. Photo: Twitter
Yes,“it really is just an economic competition,” as ChinaTalk's Schneider concluded.
Martin Chorzempa:
If the Austro-Hungarian Empire was a tyranny tempered by incompetence, as the old joke goes, the BIS export controls are an economic blockade mitigated by ineptitude. In the rush to publish the new guidelines, the BIS produced an incomprehensible jumble of half-baked tech criteria.
Jay Goldberg: Doug O'Laughlin: Jordan Schneider: Jay Goldberg: Goldberg concluded,“I've heard that it was deliberate: they wanted to keep certain industry bodies out of the process because they have a lot of lobbying weight.”
US chip equipment makers like LAM Research and Applied Materials, and design tool providers like Synopsis and Cadence, stand to lose the 20% to 30% of revenue they derive from China, with devastating consequences for their CapEx and R&D budgets.
Scott Foster of Asia Times reported that US semiconductor firms would suffer more damage than China from the new regulations.
US President Joe Biden wants more advanced semiconductors produced in America. Image: Twitter
The shoddiness of the Commerce Department's technical specifications and the exclusion of US industry from the policy loop suggests a sudden onset of panic in the Biden administration over China's technological advancement.
In January 2020, by contrast, the Pentagon overruled a Commerce Department plan to block exports of chip technology to just one Chinese company, namely Huawei, because US chip equipment firms would“lose a key source of revenue, depriving them of money for research and development needed to maintain a technological edge,” the reported at the time.
The Biden administration has made sure that the industry wouldn't have the opportunity to object.
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