Sanctions Against China Chip Makers Threaten Global Semiconductor Industry.

The China Semiconductor Industry Association (CSIA), a state-supported trade group, has objected to the US-led agreement with Japan and the Netherlands to further restrict China's access to chip-making technology. The association stated that such a move would be detrimental to the entire semiconductor industry and would signify a step back in the age of free trade. In a statement released on its website, the trade body condemned government intervention and called for increased support for globalization and resistance to efforts that destabilize supply and demand. The CSIA also opposed acts that exclude China's semiconductor industry from the global innovation system and free-market competition. The US, Japan, and the Netherlands had reportedly agreed to impose export controls against China, covering specific chip-making equipment, but the details of the trilateral agreement have not been disclosed.

The Chinese Foreign Ministry's spokesperson, Mao Ning, stated during a briefing on January 30 that the US-led agreement is not only harmful to all concerned parties but also poses a threat to the stability of the global semiconductor supply chain. ASML Holding, a Dutch chip-making equipment supplier that is prohibited from selling its most advanced lithography machines to China, mentioned in its latest annual report that any new restrictions would take months to develop and enforce. The concerns raised by the CSIA highlight the potential harm of increased US pressure on China's semiconductor industry, which comes after the US implemented stricter regulations that limit China's access to advanced chips and President Joe Biden enacted the Chips and Science Act to enhance America's high-tech manufacturing capabilities.

In December, China responded to the US government's trade restrictions by filing a complaint with the World Trade Organization's dispute-settlement body, which is its most robust reaction so far. The Ministry of Commerce stated that this was a typical practice of trade protectionism. A month before the US's unilateral export limitations in October, the CSIA urged China to increase its self-reliance in innovating and developing core technologies. However, core technologies remain China's Achilles' heel, despite having the world's most potent industrial manufacturing capability. China's semiconductor foundries continue to rely on imported tools for their operations, making them an easy target for Washington in its tech containment strategy.