Tag Archives: semiconductors

China Brings WTO Case Against U.S. Chip Export Curbs

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China initiated a dispute against the U.S. at the World Trade Organization (WTO) over Washington’s sweeping semiconductor export curbs that look to cut the world’s second-largest economy off from high-tech components, CNBC reported.

According to CNBC, the Chinese Ministry of Commerce confirmed the trade dispute in a statement on Monday and accused the U.S. of abusing export control measures and obstructing normal international trade in chops and other products. It said the WTO dispute is a way to address China’s concerns through legal means.

In October, the U.S. imposed new export restrictions on advanced semiconductors and chip-manufacturing equipment in an effort to prevent American technology from advancing China’s military power. The rules would require U.S. chip makers to obtain a license from the Commerce Department to export certain chips used in artificial-intelligence, calculations and supercomputing – crucial technologies for modern weapons systems, senior administration officials said.

The Wall Street Journal reported that Beijing will use the WTO’s dispute settlement mechanism to challenge U.S. export controls on products such as chips to China to defend its rights and interests, its Ministry of Commerce said in a statement posted to its website. The ministry said it was responding to a media question in making the announcement.

According to The Wall Street Journal, the rules being challenged require U.S. chip makers to obtain a license from the Commerce Department to export certain chips used in advanced artificial-intelligence calculations and super-computing. Biden administration officials have said the rules are needed to prevent China from building up its military and developing new, state-of-the-art weaponry.

The Wall Street Journal also reported that a spokesman for the Office of the U.S. Trade Representative confirmed that the U.S. has received a request for consultations from the People’s Republic of China related to certain U.S. actions affecting semiconductors. “As we have already communicated to the PRC, these targeted actions relate to national security, and the WTO is not the appropriate forum to discuss issues related to national security,” he said.

Reuters reported that the regulations made by the U.S. aimed at kneecapping China’s semiconductor industry, prompting a complaint from a top China trade group.

“China takes legal actions within the WTO framework as a necessary way to address our concerns and to defend our legitimate interests,” said a statement by China’s commerce ministry, its diplomatic mission in Geneva relayed.

According to Reuters, the so-called request for consultations is the first step in a long procedure at the global trade body. The United States has blocked appointments to the WTO’s top ruling body on trade disputes, meaning some rows never get settled.

It sounds like the complaint made by China is going to languish at the WTO, especially since the request appears to have a long procedure attached to it before a decision is made. As such, China shouldn’t assume that they are going to get “next-day-service” from the World Trade Organization.

U.S. Restricts Semiconductor Exports

Technology,

The U.S. imposed new export restrictions on advanced semiconductors and chip-manufacturing equipment Friday in an effort to prevent American technology from advancing China’s military power, The Wall Street Journal reported.

The rules will require U.S. chip makers to obtain an license from the Commerce Department to export certain chips used in advanced artificial-intelligence calculations and supercomputing – crucial technologies for modern weapons systems, senior administration officials said.

According to The Wall Street Journal, the U.S. already requires licenses for exports of many advanced technologies to Chinese entities deemed to be working against U.S. national-security interests. Friday’s move expands that to include exports of crucial cutting-edge chips and equipment that can’t be obtained elsewhere. The rule will allow the U.S. to block foreign-made chips that are manufactured with U.S. technology, the officials said.

The restrictions are some of the broadest the U.S. has ever enacted against China’s chip industry, veering from previous actions that often targeted individual companies and a narrower subset of technology.

The New York Times reported that the Biden Administration on Friday announced sweeping new limits on the sale of semiconductor technology to China, a step aimed at crippling Beijing’s access to critical technologies that are needed from everything from supercomputing to guiding weapons.

According to The New York Times, the moves are the clearest sign yet that a dangerous standoff between the world’s two major superpowers is increasingly playing out in the technological sphere, with the United States trying to establish a stranglehold on advanced computing and semiconductor technology that is essential to China’s military and economic ambitions.

The New York Times also reported that companies will no longer be allowed to supply advanced computing chips, chip-making equipment and other products to China unless they receive a special license. Most of those licenses will be denied, though certain shipments to facilities operated by U.S. companies or allied countries will be evaluated case by case, a senior administration official said in a briefing Thursday.

The Verge reported that the decision follows months of increased investment by the U.S. in domestic and semiconductor manufacturing. In August, President Joe Biden signed the $280 billion CHIPS and Science Act, providing $52 billion in subsidies to boost companies choosing to build chip manufacturing plants in the U.S.

Overall, this seems like a good plan for the United States. It appears that the CHIPS bill is intended to encourage American companies to make chips here at home, while also making it harder for China to obtain chips made in the United States.