The following article by Bappa Sinha, originally published in People’s Democracy (the English-language weekly newspaper of the Communist Party of India (Marxist)) provides valuable insight into the US-initiated “chip wars” against China, which “show no signs of abating and have escalated further in 2023 with indications of more to come.”
Sinha describes the rationale for the chip wars as being essentially economic, with the US seeking to maintain its technological dominance. “Having already lost its manufacturing leadership due to outsourcing production, the US is critically dependent on its lead in advanced technologies to retain its global dominance. With China catching up and, in many cases, leapfrogging the US in frontier technologies, the US sees the denial of semiconductor technologies with its outsized impact on modern production and economy as an effective mechanism of keeping China down.”
The author details the numerous measures that have been taken by both the Trump and Biden administrations to restrict China’s access to advanced semiconductor technologies, including the imposition of export controls, the blacklisting of Chinese companies, and the imposition of sanctions.
However, “China has not been sitting on its hands waiting for its economic development to be choked.” China has been leveraging its particular advantages – its huge internal market, its dominant position in manufacturing, its education system, massive funding for research, and its “socialist economic planning which can set national industrial policy to undertake long term strategic initiatives” – in order to break the US’s technology siege.
In August 2023, Huawei released the Mate 60 pro, powered by a Chinese-manufactured 7nm chip – “precisely the kind of processor that the US sanctions had sought to prevent with their stated goal of denying China access to 14nm and below chip technology.” Industry insiders expect that China will soon be able to produce a 5nm chip. “These releases and announcements indicate China has weathered the storm and is poised to break through the siege that the US sanctions have sought to enforce.”
Sinha concludes that the US’s chip wars are destined for failure.
“Despite its head start in semiconductor technologies and massive financial resources at its disposal, the US, under neoliberal capitalism, is unlikely to be able to put policies in place to be able to remain ahead of China in the long run.”
The chip wars launched by the United States and its allies against China show no signs of abating and have escalated further in 2023 with indications of more to come. These wars are, in effect, a siege on China’s technological progress and economy. These across-the-board sanctions on leading-edge semiconductor chips, technology and equipment are a desperate attempt by the US to hold on to its geopolitical hegemony.
Background
While people are focused on the Ukraine war and Taiwan as frontiers of the geopolitical tussle between the US-led western alliance and the emerging powers of China and Russia, another front where the battle is being waged is in the tech domain – specifically, the semiconductor sanctions that the US is using to curtail China’s access to advance chips and technology to manufacture them. The US’s excuse for these measures is framed in military terms, saying that advanced semiconductors enable China to produce advanced military systems and improve the speed and accuracy of military decision-making. The tired western bogeyman of human rights violations is also cited as a reason for these sanctions. The sanctions are a naked attempt by the US to wage economic war against China. Having already lost its manufacturing leadership due to outsourcing production, the US is critically dependent on its lead in advanced technologies to retain its global dominance. With China catching up and, in many cases, leapfrogging the US in frontier technologies, the US sees the denial of semiconductor technologies with its outsized impact on modern production and economy as an effective mechanism of keeping China down. These actions are akin to technology denial regimes that the US, along with its allies, implemented during the Cold War.
The current round of technology sanctions by the US started in 2018 under the Trump administration. With the US increasingly getting concerned with China’s progress and leadership in telecommunications, especially in 5G, the US barred procurement of Huawei and ZTE equipment by all US federal government agencies, citing security concerns. This was especially ironic given the Snowden revelations about all leading US telecom equipment makers routinely having backdoors in their equipment for snooping purposes by the US intelligence agencies. The ban was preceded and followed by intense US lobbying worldwide, asking foreign governments to implement similar restrictions on Huawei. In December 2018, Huawei CFO Meng Wanzhou was arrested in Canada on US request under the pretext of violating US sanctions against Iran. These actions wouldn’t suffice as Huawei was already the global leader in 5G technology, having become the world’s largest manufacturer of telecommunications equipment and the second largest manufacturer of mobile phones, supplanting Apple from that position. In May 2019, the US cut off Huawei from access to American technology. This not only cut off Huawei from procuring US chips but also from designing and getting the chips made from foundries such as TSMC, as those also depended on US technology. On the software side, Google announced that it would cut Huawei’s access to the Android platform. These moves were a fatal blow to Huawei’s phone business as Huawei had no short-term solutions for the loss of access to mobile chips. Their telecom equipment business (such as bay stations) survived as it didn’t depend on leading-edge chips and could be procured locally.
Continue reading Chip wars: breaking the siege