China opposes US abuse of national security as chip export restrictions extended

A chip manufacture machine Photo: VCG

A chip manufacture machine Photo: VCG

China has strongly opposed the US’ latest revised rules, which make it harder for China to gain access to US artificial intelligence (AI) chips and chipmaking tools, stating that it will disrupt the international semiconductor market as well as cooperation among enterprises. 

The remarks, made by China’s Ministry of Commerce (MOFCOM) on Sunday evening, noted that the latest revision of semiconductor export controls came less than six months since the US introduced the rule. 

Chinese experts also slammed the move as another attempt by the US to relentlessly crack down on China in the technology sector, sacrificing the interests of US companies.

The new rules, which run 166 pages, will go into effect on April 4, and they expand the restrictions to laptops containing those AI chips, Reuters reported.

The US further tightened export restrictions on AI-related chips and semiconductor manufacturing equipment to China in October 2023, seeking to halt shipments of more advanced AI chips designed by Nvidia and other companies.

The US is also drawing up a list of Chinese advanced chipmaking factories to be barred from receiving key tools from the US, Reuters reported on Thursday.

In response, China’s Foreign Ministry spokesperson Lin Jian on Friday urged the US to immediately correct its wrongdoings and stop its illegal unilateral sanctions and long-arm jurisdiction against Chinese companies.

The US launched tech blockade and restrictions on China and sanctions and suppression against Chinese companies with an intent to contain China’s development. They gravely harm the legitimate rights and interests of Chinese companies, violate market economy principles, undermine international trade rules, and destabilize the global industrial and supply chains, Lin said.

China will continue to closely follow developments and firmly safeguard the lawful rights and interests of Chinese companies, Lin said.  

Ma Jihua, a veteran telecom industry observer, told the Global Times on Sunday that currently, the practical application of AI on laptops is primarily focused on gaming, graphics displays and entertainment. However, the use of AI chips on laptops is not yet widespread, and large-scale application may not occur in the short term.

The restriction is just another way for US politicians to demonstrate a tough stance on China, especially during the election period, after they had tried other avenues, Ma said.

In recent years, the US has intensified its efforts to accelerate high-tech export restrictions on China, expanding from high-end chips to include more legacy chips and extending from chips in smartphones to those in computers, Ma noted.

The tightened restriction also comes as US chipmakers ramp up efforts to retain the Chinese market.

When CEOs of some leading US semiconductor companies including AMD, Qualcomm and Micron visited China to attend the China Development Forum (CDF) in Beijing last week, they expressed their commitment to the Chinese market and willingness to pursue cooperation.

During the CDF, HP announced plans to launch and sell AI chip powered personal computers by the end of 2024, and collaborate with local software developers in China to provide them with the applications they need, Chinese media outlet yiicai.com reported.

Micron Technology on Wednesday broke ground at its new plant in Xi’an, Northwest China’s Shaanxi Province, as part of its $603 million investment plan announced in June 2023.

US chipmaker NVIDIA said on March 18 that it is expanding collaboration with Chinese enterprises to provide an in-vehicle computing platform created for AI applications to Chinese companies, including BYD.

Nvidia was twice forced to design and produce chips specifically for the Chinese market to circumvent US export controls. The previous “downgraded” chips failed to gain traction in China.

With tightened restrictions, American companies could lose valuable business opportunities and suffer from the restrictive policies of the US government. Meanwhile, Chinese companies are moving toward embracing domestic replacements, creating a more self-sufficient ecosystem that could leave American companies behind, Ma said.

In the fourth quarter of 2023, Chinese chip manufacturer HiSilicon’s shipment volume reached 6.8 million units, up more than 50 times year-on-year, media reports said, citing data from Canalys.

Tian Yun, a veteran economist based in Beijing, told the Global Times on Sunday that the tightening of US restrictions on exports and technology in the high-tech sector to China is not surprising. Yet its impact and shock to Chinese industry is decreasing, given China’s industrial upgrading in recent years.

China will launch an AI Plus initiative to promote the innovative development of the digital economy, according to the 2024 Government Work Report.

China will step up research and development and the application of big data and AI, launch an AI Plus initiative, and build digital industry clusters with international competitiveness, read the report.