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Android Headlines / Tech News / China unconcerned by latest US chip export restrictions

China unconcerned by latest US chip export restrictions

A new set of US trade restrictions against China became official today. The move comes a few weeks after it was discovered that Huawei managed to obtain AI chips developed with US technology in TSMC factories. Also in the midst of investigations into a potential hacking campaign against big American carriers. Now, China responds to the latest US export restrictions, stating that they can overcome them.

If you are not aware, the new chip trade restrictions prohibit 140 companies from doing business with China. The restrictions impact chip manufacturing equipment, software tools, and high-bandwidth memory. The latter is a key component in the production of hardware for artificial intelligence. US representatives confirmed that the move seeks to restrict access to AI chips that help strengthen China’s military power and put US national security at risk.

China responds to new US export restrictions

That said, it seems that the Chinese tech industry was expecting even more severe restrictions. Several of the country’s most important companies in the segment appear to be unconcerned about the announcement. Following the official confirmation of the new restrictions’ scope, some even saw an increase in their stock value.

The main reason for the apparent calm among Chinese companies is their long-term accumulation of equipment and relocation of the supply chain. Data from Chinese customs reflects this, estimating some $24.12 billion in imports of semiconductor-related equipment during the first nine months of 2024. This represents an increase of a third compared to the same period last year.

Empyrean, an electronic design automation (EDA) supplier, sees the US move as an opportunity. “The company will seize the development opportunity to accelerate the localization process of full-process EDA tools,” the brand said. Jiangsu Nata Opto-Electronic Material, a supplier of materials for chip production, said it has already accumulated sufficient equipment. The company will also replace some components with local alternatives.

There is also Beijing Huafeng Test & Control Technology, a supplier of chip testing systems. The company said its entire production chain has already been relocated to China.

US movement could have a smaller impact than expected

China’s chip production industry is highly dependent on outsourced equipment. After all, the best manufacturing processes and lithography are developed in other countries. Examples of this include the struggle of SMIC factories to produce enough chips for Huawei and their reliance on outdated manufacturing processes. With that in mind, the new restrictions seemed to be looking to have a significant impact. However, analysts claim that they were softer than expected.

In fact, the Biden administration even excluded ChangXin Memory Technologies (CXMT) from the entity list. This was quite surprising, as it is the main Chinese manufacturer of a key component in AI chips. This strengthened the shares of both CXMT and its partners. For example, the stock value of Jusung Engineering—CXMT supplier—and Mirae Corp—South Korean chip equipment maker—rose by 7.7% and 1.4% after the restrictions were announced, respectively.

Jean has been a mobile-tech enthusiast since ever. He likes to always be up-to-date on the latest news in the industry and write about it. He specializes in Android, smartphones, tablets, wearables, apps, and some gaming.

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