The US-China technology competition is centered around semiconductors, and the Biden administration has implemented export controls to maintain the US's lead in this race. These restrictions aim to limit China's access to advanced semiconductors needed for AI models, supercomputers, and hypersonic missiles. Additionally, the measures prevent China from using US-built semiconductor design and manufacturing equipment, including crucial electronic design automation (EDA) software.

Chinese President Xi Jinping in Tsinghua University in Beijing, on April 19, 2021.

However, despite these restrictions, engineers at Tsinghua University, China's top technology university, have found workarounds to continue using EDA software. They utilize backgate channels or special licenses to access popular EDA providers such as Cadence and Synopsys. Moreover, they send their chip designs created with EDA software to companies like Taiwan Semiconductor Manufacturing Company (TSMC) for manufacturing, effectively bypassing the intended restriction.

While Chinese firms have developed their own EDA software, many students still rely on US technology, citing the necessity of compatibility and the difficulty in transitioning to new software.

There are concerns that Tsinghua engineers who have access to US EDA software may be engaged in dual-use or military end-use research for China's military-civil fusion initiative. Tsinghua University is considered a "high-risk" institution due to its involvement in various military research sectors that heavily depend on advanced semiconductors, including navigation technology, AI, and air-to-air missiles.

Limiting China's cutting-edge semiconductor development alone is not sufficient to weaken the People's Liberation Army (PLA). The PLA primarily relies on less sophisticated chips for its military technology, such as missiles, space technology, and jets, which are not targeted by the restrictions.

By not imposing restrictions on China's mature chip industry (16nm and above), the United States has unintentionally stimulated its growth. This has allowed China, particularly Semiconductor Manufacturing International Corporation (SMIC), to expand its production facilities for mature nodes, increasing its potential dominance in the global market.

While US sanctions have had some impact, there is still uncertainty regarding China's ability to design cutting-edge chips comparable to foreign firms. The future of China's domestic semiconductor industry and the role of US sanctions in shaping this environment remain subjects of debate.

To effectively counter China's commitment to dominating critical technologies, the US should consider increasing EDA software restrictions and reassess the balance between controlling mature-node chips and potential inflation risks. As semiconductors are fundamental to the entire technology industry, the nation that controls their global production network holds significant geopolitical power. Given China's aggressive actions and unfair market practices, allowing it to occupy this position could have negative implications for the Indo-Pacific region and the world.