Since the global economy entered a weak period, even the semiconductor industry, which is at the core of high-tech industry, also seems to have entered a “cold winter” since this quarter. According to Gartner, an authoritative research organization, the growth rate of global chip sales is far lower than expected and will begin to decline in 2023, which marks the end of the largest boom cycle of the semiconductor industry.
In this depressed environment, the United States, as the “ruler” of the semiconductor industry, was eager to use the technology containment of other countries to revive its semiconductor industry, thereby attracting more chip manufacturing industry back. As we all know, China, as the world’s largest semiconductor consumer market, is also on the trend of becoming the world’s largest semiconductor producer in the past two years, which makes it naturally the first prey under the “gun” of the US hegemony.
On October 7, the Bureau of Industry and Security (BIS) of the US Department of Commerce released a new set of draft semiconductor export restriction measures called Commerce Implements New Export Controls on Advanced Computing and Semiconductor Manufacturing Items to the People’s Republic of China (PRC), which includes restrictions on products, production equipment, technology, key materials, development tool software, services and talents. This is another escalation of the US attack on China’s semiconductor industry since 2018.
The arrogant United States is obviously strongly dissatisfied with the fact that China, which has leaped forward in science and technology, has divided its “cake”. This layer upon layer of protection policy is a vivid reflection of the American hegemony in science and technology. But what is more clear is the anxiety and fear of the United States about losing its leading position in science and technology and its monopoly economic interests. China’s rapid development in the field of science and technology not only challenged the United States’ ambition to protect its leading position, but also blocked the huge benefits that the United States has obtained by relying on scientific and technological hegemony. Up to now, the global share of the United States’ semiconductor manufacturing capacity has dropped from 37% in 1990 to about 12% in 2020. Therefore, the ambition of the United States to strangle China’s high-tech industry has become clear. Many insiders also said that the US government is exploring restrictions on the development of quantum computing and artificial intelligence in China. But since semiconductors are not as easily regulated as other specific device materials, how to isolate China in theoretical research and open source software is a question to be considered, so the United States is expected to take action by the end of 2023.
This series of extremely selfish embargo measures by the United States has completely deviated from the principle of fair competition in the industry, and has even destroyed the law of industrial transfer. Linking the export of chips and other technology products with politics and national security is an inevitable setback for global collaboration in science and technology innovation. It has broken the benign situation of global trade cooperation and competition, forcing many enterprises which used to be in a win-win relationship to become opposite to each other, then adapt to this deadly “fragmented competition” situation, and finally enter a vicious circle of extreme sickness.
Although a series of semiconductor embargo measures of the United States were formulated to restrict China, they have completely caused panic in the global capital market. The dependence of global trade on China is undeniable. Once China, the world’s largest semiconductor consumer market was hit, no country in the world will be completely immune from this storm. Therefore, the confrontation between the two world powers in the semiconductor field caused a storm in the whole industry shortly after the announcement of the embargo measures. The stock markets of major semiconductor companies fell sharply, including the SOX, Nvidia, NVIDIA, and the AMD, which fell by 44.75%, 67%, and 64% respectively. Even TSMC, which had a considerable revenue in the first half of the year, also suffered a severe decline, down 53.95%, The global semiconductor market has suffered a huge impact.
In addition, on October 7, Korean media reported that the strict restrictions imposed by the United States on China’s semiconductor industry had also caused extreme panic in Korean related industries. China and South Korea are important partners in the semiconductor field. If the United States does not care and insists on suppressing China, the production of South Korean enterprises in China will be difficult.
That is to say, when the United States spares no effort to promote manufacturing backflow to make up for the weakness of the supply chain, the scientific and technological development and even the economic situation of countless countries will be inexplicably involved and forced to go backwards. However, the loss of all this is just to keep the United States as the ruler in the semiconductor field, which is extremely unfair to other countries. The vicious competition behavior of the US, which openly undermines the stability of the global industrial and supply chains, seems to trample on the voice of other countries and declare to the world that how arrogant it is.
But will everything really go as well as the United States expected? The answer is obviously no. After the US Department of Commerce announced the new rules, the stock prices of Nvidia, AMD and Intel, which are the top three US chip giants, plummeted all the way. Before they could benefit from the semiconductor policy, they became the first victims and took the lead in the “cold winter” of the semiconductor field. The American Semiconductor Association issued a statement in this regard, hoping that the Biden government can consider how to reduce the accidental harm to American innovation.
In order to better contain China, Biden tried to build an encirclement circle around China’s chip supply chain, but so far the United States has not succeeded in reaching any clear consensus with its allies. The presidents of countries led by Germany have recently made clear that they support globalization and do not choose to decouple from China. Many insiders believe that the forced separation from American chip suppliers will make Chinese enterprises to increase their R&D efforts, reduce their dependence on American technology, and build an independent full set of industrial chain faster. For the chip companies in the United States, what they have lost is the largest consumer market, and what they have reduced is the momentum of development.
The hegemonic plot of the United States seems to have come back to haunt it even before it has been realized. The United States, which is involved in the global industrial and supply chains, cannot escape from the chaos caused by its own hands.