US tightens export controls on chip tech
Australian tiesAug 16, 2022
Last updated Aug 16, 2022
Image credit: CFOTO/Zuma Press [via The Wall Street Journal]Facts
- According to a report published by the Wall Street Journal on Tues., the US Dept. of Commerce (DOC) approved nearly all tech export requests to China in 2020, which critics warn could be used to advance Beijing's military interests.
- DOC data reveals that of the US's $125B in exports to China in 2020 - including sensitive technologies - officials required a license for less than half a percent.
- Of the small fraction of exports that required a license, 94% were still approved for export to China, including semiconductors, aerospace components, AI technology, and other materials.
- The report comes alongside new DOC restrictions on exporting advanced chip design software to the US's top economic adversary in an alleged attempt to hamper China's ability to manufacture the chips domestically.
- The DOC included gallium oxide and diamond-based chips in its export ban as they can endure higher temperatures and voltages, making them suitable for military use.
- The DOC says its new restrictions are part of an agreement made last Dec. by the 42 countries that participate in the Wassenaar Arrangement, an international arms control pact that excludes China.
Spin
Pro-China narrative
While the US claims it's simply trying to boost its own domestic chip production, what it's actually doing is pushing China out of the industry altogether. In an already-struggling semiconductor production industry, the US is further disrupting a global economy that relies heavily on these technologies.
Anti-China narrative
With China rapidly encroaching militarily on US allies in the Pacific, these new restrictions are positive news. The tight relationship between national security and semiconductor production has been recognized for decades; if China were to surpass the US in the long-term, it could quickly become dominant in every area of warfare. The US is right to withhold such resources from its top geopolitical adversary, which would undoubtedly use them for nefarious purposes.
Nerd narrative
There's a 50% chance that China will spend at least $36M on importing diodes and semiconductors in 2022, according to the Metaculus prediction community.
