Trade-protected Chinese Chips: Challenges for the Chinese Semiconductor Industry and China’s Technological Ambiguities in the Light of Recent China Papers
Last month, the Chinese ecommerce giant Alibaba revealed a powerful new cloud computing system designed for artificial intelligence projects. It was built using chips from companies like Intel and N-d-e-y, and is used for tasks like video analysis and chatbot dialogue in the company’s cloud customers.
On October 7, the Biden administration unveiled a sweeping set of export controls that ban Chinese companies from buying advanced chips and chip-making equipment without a license. The rules also restrict the ability of US citizens or green card holders to support the “development or production” of chips at certain manufacturing facilities in China.
The commerce ministry decried the US move, calling it atypical practice of trade protectionism. China lodged a complaint at the WTO against the US chip sanctions.
Baidu, the leading Chinese web search provider and a key player in cloud AI services and autonomous driving, also uses Nvidia chips extensively in its data centers. Last October the company announced one of the world’s largest AI models for generating language, built using Nvidia hardware.
ByteDance, the Chinese company behind TikTok and its counterpart in China, Douyin, relies on Nvidia hardware to train its recommendation algorithms, according to its own software documentation. China has banned manufacture of chips from outside of its borders, meaning Chinese companies need to find a way to make their chips in another country. Both of these companies refused to comment on the new rules. WIRED did not receive responses to inquires about ByteDance and other Chinese chip firms.
The measures are seen by analysts as a major threat to China’s tech ambitions due to the fact that the global Semiconductor industry is heavily dependent on the United States and countries aligned with it for chip design, tools that make them, and fabrication. It also comes as the United States is looking to bolster its domestic chip manufacturing abilities, after chip shortages earlier in the pandemic highlighted the country’s dependence on imports from abroad.
The U.S. Chip Export Correspondence to the World Trade Organization (WTO): The China-US Consortium Files a No-Go Theorem
The country’s commerce ministry filed a formal complaint against the United States with the WTO on Monday, according to a statement. The trade body allows both countries to resolve disputes.
“China’s filing of a lawsuit at the WTO is to resolve China’s concerns through legal means and is a necessary way to defend its legitimate rights and interests,” the ministry said.
Washington has made it clear that it wants chip-related curbs on China. Jake Sullivan, the White House national security adviser, said on Monday that Washington had spoken with its partners including Japan and the Netherlands to tighten chip-related exports to China, according to Reuters.
The Chinese government set up an industry alliance of companies and research institute after the US hit it with a ban on export of telecom equipment from China. The group’s focus is on developing Risc-V, an open-source chip design architecture that has increasingly become a rival to Softbank
(SFTBF)’s Arm, the current global leader. Members of the consortium include the Chinese Academy of Sciences, Alibaba
(BABA), Tencent
(TCEHY), and Baidu
(BIDU).
Chinese companies are unable to purchase Arm’s Neoverse V1 and V2 chip designs, limiting their performance for cloud computing and machine learning. Amazon Web Services (AWS) EC2 instances already include Arm Neoverse V1 chip designs, allowing US companies to benefit from performance improvements.
The new plant is one of the first to come out of the CHIPS and Science Act. Intel is planning to invest $100 billion in Ohio over the next 10 years. More recently, President Biden joined Tim Cook to celebrate production equipment arriving at TSMC’s first fab in Arizona, scheduled to begin making advanced chips for Apple and others in 2024, before adding a new site in 2026.