US Tightens Stance on China's Semiconductor Industry, Investments Soar
The US is tightening its stance on China's semiconductor industry, with recent moves including pressure on Germany to impose export controls and requests to the Dutch government to restrict ASML's services to Chinese customers. Meanwhile, China is investing heavily in its local chipmakers, raising $27 billion for the third phase of its China Integrated Circuit Industry Investment Fund.
The US is stepping up its efforts to curb China's access to advanced semiconductor technology. It has been urging Germany to implement export controls, similar to those already in place by the Netherlands and Japan. Additionally, the US is seeking restrictions on ASML's services to Chinese customers from the Dutch government. These moves come as China continues to develop its domestic chip industry, with Beijing's latest investment of $27 billion in the 'Big Fund' aimed at boosting local chipmakers.
In a separate development, the US is scrutinizing China's maritime logistics industry due to potential security vulnerabilities related to Chinese-made cranes at US ports. This follows a significant seizure of goods valued at over $301 million by US Customs and Border Protection in February, due to suspected Uyghur forced labour, the highest value since the UFLPA came into effect. The US is also engaged in discussions with South Korea and Japan on potential chip restrictions.
The US is also reaching out to Japan to limit exports of vital chemicals used in semiconductor manufacturing to China. This follows a report that several major automakers, including GM, Tesla, BYD, Toyota, and VW, have failed to adequately address the risk of Uyghur forced labour in their aluminium sourcing.
The US's actions aim to slow China's progress in the semiconductor industry, while also addressing potential security vulnerabilities and labour concerns. However, these moves could potentially exacerbate the global semiconductor shortage, with Taiwan, which accounts for nearly 40% of global semiconductor production, at the centre of geopolitical tensions.
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