The United States – China trade war, which has grown more heated during the Trump administration, is still ongoing. While the US keeps enforcing strict sanctions on China‘s chip and supercomputer industry, it is now beginning to impose similar restrictions against Japan and Netherlands. The Semiconductor Industry Association (SIA), a body representing almost all of America’s chip manufacturers, forewarns that such actions could prove damaging for both sides.
The Embargo on China Slows Growth of US Chip Manufacturers
The Semiconductor Industry Association (SIA) acknowledges the significance of US national security but stresses that restricting potentially hostile countries could have detrimental effects on the entire semiconductor industry. According to them, export controls should be implemented without compromising innovation.
In October 2022, the US government imposed hard-hitting sanctions against China‘s chip and supercomputer industries. As a result, numerous semiconductor companies were devastated, with their value plummeting by $240 billion in an instant. This included EDA tool creators, integrated circuit designers, WFE manufacturers, and chip manufacturers. Despite this setback, without the input of Chinese customers, it is expected that the American semiconductor industry will not only survive but continue to prosper; however, SIA believes its growth could be further accelerated should it remain engaged with these clients!
Chinese and American Manufacturers Developed Deep Ties
The SIA reveals that US semiconductor companies typically dedicate about a fifth of their profits to research and development; businesses also contribute much attention overseas. Consequently, the extent of China is accentuated since numerous US tech firms provided Chinese counterparts with equipment. It is important to remember that when the market begins to decline, it will have an unfavorable impact on America’s semiconductor industry—even if some businesses are forced to cut jobs.
