(MENAFN- Asia Times)
Back in June, the Federation of American Scientists teamed up with Noahpinion, ChinaTalk, and Chris Miller to hold a crowdsourced policy competition.
We asked for ideas on how to deal with the problem of China potentially controlling the supply of foundational chips (also called“trailing-edge” semiconductors). Here was the post where we made the announcement:
The US has implemented
export controls
to try to stop China from getting a technological edge in advanced cutting-edge chips. But
as I explained in a recent post , export controls have no hope of stopping China from building simpler types of chips - called“legacy chips”,“foundational chips”, or“trailing-edge chips.” These legacy chips are used for a huge number of things in our economy, from cars to smartphones to fighter jets.
And China is gearing up to build these legacy chips in absolutely staggering numbers. Check out
this post by Jimmy Goodrich
of the University of California Institute on Global Conflict and Cooperation and
this post by the Rhodium Group
for details. Basically, China is applying the same approach to legacy chips that it has successfully applied to batteries and EVs - massive scale and enormous subsidies. Already,
This basically presents at least three potential dangers to the US:
First, China could deprive non-Chinese chipmakers of huge amounts of revenue by outcompeting them in the legacy chip market, making it harder for them to sustain their leading-edge chip businesses. Already investors are pressuring US companies to avoid competing with China by canceling their semiconductor fabs.
Second, if China controls the legacy chip market, it could cut off our supply of chips in a war.
Third, Chinese security services might be able to put back doors into Chinese-made chips, using them to spy or even to attack US infrastructure.
In other words, there are plenty of national security reasons for keeping Chinese-made legacy chips out of our supply chain. But how can we do it? It's a tough problem.
First of all, as things stand,
we don't even know
which products contain Chinese-made chips. If a Vietnamese-made phone or a Mexican-made PC includes Chinese-made legacy chips, the US currently has no way of knowing.
Second, even if we
did
know, it might be politically unpopular to ban those chips. A lot of US companies want to get chips as cheaply as possible, especially for new AI applications. We'd need some way to make chip restrictions politically palatable.
And finally, lots of Chinese legacy chips - and the products that contain them - aren't going to be sold in the US or our allied countries. How do we make sure non-Chinese chipmakers stay competitive in markets like Vietnam, Brazil, Indonesia, etc?
We asked contestants to give us their ideas for addressing this problem. In the end, we decided that four of the submissions we received really stood out. These winners are listed in alphabetical order by first author.
Winner #1: Weaponizing EDA and using targeted industrial policy
By: Zenghao (Mike) Gao, Charles Yockey, and Felipe Chertouh
Gao et al point out an important weapon in the US' arsenal of export controls that hasn't been used yet: Electronic design automation software (EDA). We hear a lot about where the
production
of chips happens, and some about where the production of
chipmaking tools
happens, but not very much about where the software used to design chips comes from.
In fact,
almost all of it comes from America , with a little bit coming from US-allied countries like Japan and Australia. And this software doesn't just design chips in the first place; it's also what chipmakers use to correct problems with the fabrication process as they arise.
Gao et al. suggest that EDA could be“weaponized” by mandating that it run on US-based cloud servers:
This idea wouldn't stop China from making foundational chips - Chinese companies could still use American EDA software. But it might give the US one more piece of leverage to hold over China in case hostilities broke out - and another way to try to slow down the Chinese chip industry in general, if that becomes necessary.
On the defensive side of things, Gao et al. also call for the US to form a trade bloc with Latin American nations to ensure safe supply of rare earths and NAND memory. They also have some additional ideas, such as forcing Chinese companies to release the source code for the firmware and other software for their chips.
You can
read Gao et al's full policy proposal here .
Winner #2: Working with other countries on industrial policies and tariffs
By: Andrew Lee
Lee sees the creation of a non-China foundational chip supply chain as the central problem to be solved. He envisions a program modeled after Lend-Lease - the system by which the US delivered arms to the UK in World War 2, and by which it's currently delivering arms to Ukraine. The program would license US technology cheaply to friends and allies in exchange for cooperation in creating completely China-free chip supply chains:
(Side note: It occurs to me that this might dovetail well with Gao et al.'s proposal for putting EDA on a US-based cloud.)
MENAFN11102024000159011032ID1108769730
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.