2023-06-29 21:38:37
Geopolitical turmoil threatens the most important industry in the world
Chen Nanxiang, chairman and acting CEO of Chinese chip maker Yangtze Memory Technologies (YMTC), said Thursday that geopolitical factors and national security concerns of some countries threaten the globalization of the world’s chip industry and its future growth.
This made him doubt whether the global semiconductor industry, which is the most important in the world today, will be able to achieve a previous forecast of reaching a trillion-dollar sales value by 2030, Nanxiang said, in a speech at the opening ceremony of the Semicon China conference in Shanghai.
“There’s a lot of government interference, and now a lot of political content is being added,” he added, adding that he fully agreed with comments made in March by TSMC’s Taiwanese founder Maurice Chang, in which he referred to “the death of globalization in the chip industry.” Nanxiang did not refer to any country, but it was clearly alluding to the current geopolitical turmoil between the United States and China.
Two days ago, Washington announced its intention to impose further restrictions on the export of artificial intelligence chips to Beijing, explaining that “the US administration is increasingly concerned that it might be used for espionage or otherwise, which harms US interests.”
Informed sources revealed that the US Department of Commerce may move, next month, to stop shipments of electronic chips manufactured by the American company “NVIDIA” and others to customers in China and other countries as well, without obtaining a license, according to what was reported by the “Wall Street Journal”.
And last September, Nvidia said that US officials had asked the company to stop exporting two of its best computing chips for its AI business to China.
“Our industry itself is cyclical, and each practitioner has its own way of dealing with the cycle. However, the high degree of uncertainty we face is precisely due to the destruction of globalization,” Nanxiang said. Nanxiang said he personally felt that the industry was entering a “turmoil period” on a global scale.
Modern chip making involves more than a thousand steps and requires complex intellectual property, tools and chemicals from around the world.
China is one of the largest markets for chips, and the country is trying to build up its domestic manufacturing capacity, but in recent years it has come under pressure from the United States, which is keen to undermine these efforts.
YMTC is among the main Chinese companies caught in the crossfire of recent unrest, following Washington imposed export restrictions, touching it and putting more than a dozen other players in China’s artificial intelligence chip sector on a trade blacklist last year, over concerns that US technology was being used in China. The development of previously blacklisted Chinese technology companies, including giant Huawei Technologies and Hikvision.
The move prevented YMTC’s suppliers from shipping US goods to it without a license, which is not easy to obtain.
Nanxiang alluded to YMTC’s own problems during his speech, with a direct appeal to the equipment suppliers present.
“As for the YMTC that I run, we can no longer access parts and components for the equipment that we legally purchased. If it’s fair, please make some fair rules for buying back the equipment,” he said.
(Archyde.com, The New Arab)
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