Who's Winning America's 'Tech War' With China? (wired.com) 19
In mid-2021 Ameria's National Security Advisor set up a new directorate focused on "advanced chips, quantum computing, and other cutting-edge tech," reports Wired. And the next year as Congress was working on boosting America's semiconductor sector, he was "closing in on a plan to cripple China's... In October 2022, the Commerce Department forged ahead with its new export controls."
So what happened next? In a phone call with President Biden this past spring, Xi Jinping warned that if the US continued trying to stall China's technological development, he would not "sit back and watch." And he hasn't. Already, China has answered the US export controls — and its corresponding deals with other countries — by imposing its own restrictions on critical minerals used to make semiconductors and by hoovering up older chips and manufacturing equipment it is still allowed to buy. For the past several quarters, in fact, China was the top customer for ASML and a number of Japanese chip companies. A robust black market for banned chips has also emerged in China. According to a recent New York Times investigation, some of the Chinese companies that have been barred from accessing American chips through US export controls have set up new corporations to evade those bans. (These companies have claimed no connection to the ones who've been banned.) This has reportedly enabled Chinese entities with ties to the military to obtain small amounts of Nvidia's high-powered chips.
Nvidia, meanwhile, has responded to the US actions by developing new China-specific chips that don't run afoul of the US controls but don't exactly thrill the Biden administration either. For the White House and Commerce Department, keeping pace with all of these workarounds has been a constant game of cat and mouse. In 2023, the US introduced the first round of updates to its export controls. This September, it released another — an announcement that was quickly followed by a similar expansion of controls by the Dutch. Some observers have speculated that the Biden administration's actions have only made China more determined to invest in its advanced tech sector.
And there's clearly some truth to that. But it's also true that China has been trying to become self-sufficient since long before Biden entered office. Since 2014, it has plowed nearly $100 billion into its domestic chip sector. "That was the world we walked into," [NSA Advisor Jake] Sullivan said. "Not the world we created through our export controls." The United States' actions, he argues, have only made accomplishing that mission that much tougher and costlier for Beijing. Intel CEO Pat Gelsinger estimated earlier this year that there's a "10-year gap" between the most powerful chips being made by Chinese chipmakers like SMIC and the ones Intel and Nvidia are working on, thanks in part to the export controls.
If the measure of Sullivan's success is how effectively the United States has constrained China's advancement, it's hard to argue with the evidence. "It's probably one of the biggest achievements of the entire Biden administration," said Martijn Rasser, managing director of Datenna, a leading intelligence firm focused on China. Rasser said the impact of the US export controls alone "will endure for decades." But if you're judging Sullivan's success by his more idealistic promises regarding the future of technology — the idea that the US can usher in an era of progress dominated by democratic values — well, that's a far tougher test. In many ways, the world, and the way advanced technologies are poised to shape it, feels more unsettled than ever.
Four years was always going to be too short for Sullivan to deliver on that promise. The question is whether whoever's sitting in Sullivan's seat next will pick up where he left off.
So what happened next? In a phone call with President Biden this past spring, Xi Jinping warned that if the US continued trying to stall China's technological development, he would not "sit back and watch." And he hasn't. Already, China has answered the US export controls — and its corresponding deals with other countries — by imposing its own restrictions on critical minerals used to make semiconductors and by hoovering up older chips and manufacturing equipment it is still allowed to buy. For the past several quarters, in fact, China was the top customer for ASML and a number of Japanese chip companies. A robust black market for banned chips has also emerged in China. According to a recent New York Times investigation, some of the Chinese companies that have been barred from accessing American chips through US export controls have set up new corporations to evade those bans. (These companies have claimed no connection to the ones who've been banned.) This has reportedly enabled Chinese entities with ties to the military to obtain small amounts of Nvidia's high-powered chips.
Nvidia, meanwhile, has responded to the US actions by developing new China-specific chips that don't run afoul of the US controls but don't exactly thrill the Biden administration either. For the White House and Commerce Department, keeping pace with all of these workarounds has been a constant game of cat and mouse. In 2023, the US introduced the first round of updates to its export controls. This September, it released another — an announcement that was quickly followed by a similar expansion of controls by the Dutch. Some observers have speculated that the Biden administration's actions have only made China more determined to invest in its advanced tech sector.
And there's clearly some truth to that. But it's also true that China has been trying to become self-sufficient since long before Biden entered office. Since 2014, it has plowed nearly $100 billion into its domestic chip sector. "That was the world we walked into," [NSA Advisor Jake] Sullivan said. "Not the world we created through our export controls." The United States' actions, he argues, have only made accomplishing that mission that much tougher and costlier for Beijing. Intel CEO Pat Gelsinger estimated earlier this year that there's a "10-year gap" between the most powerful chips being made by Chinese chipmakers like SMIC and the ones Intel and Nvidia are working on, thanks in part to the export controls.
If the measure of Sullivan's success is how effectively the United States has constrained China's advancement, it's hard to argue with the evidence. "It's probably one of the biggest achievements of the entire Biden administration," said Martijn Rasser, managing director of Datenna, a leading intelligence firm focused on China. Rasser said the impact of the US export controls alone "will endure for decades." But if you're judging Sullivan's success by his more idealistic promises regarding the future of technology — the idea that the US can usher in an era of progress dominated by democratic values — well, that's a far tougher test. In many ways, the world, and the way advanced technologies are poised to shape it, feels more unsettled than ever.
Four years was always going to be too short for Sullivan to deliver on that promise. The question is whether whoever's sitting in Sullivan's seat next will pick up where he left off.
A robust black market "emerged"? (Score:3)
I expect there's always been an especially robust black market in China.
Re: (Score:2)
True. And typical of communist sh*tholes. That was the oligarchy in the USSR. They are just laying low, waiting for the Party to collapse. So they can openly buy their mega-yachts.
Re: (Score:2)
Exactly, just like they do here in the USA.
Re: (Score:3)
Exactly, just like they do here in the USA.
Nobody in America is waiting for the system to collapse so they can buy a mega-yacht.
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I expect there's always been an especially robust black market in China.
Buying semiconductors is legal in China, so it's silly to call it a "black market".
Some sales may violate American laws, but those laws don't apply in China.
Re: (Score:1)
Attempting to prevent China from acquiring tech is stupid and futile They will either get it on the black market or develop it themselves They are smart and perfectly capable of developing tech
Uh-oh! I spotted a flaw in your logic. If they are “smart and perfectly capable”, why do they need to resort to nefarious and illegal means?
Re: (Score:2)
Same reason people pirate movies. Its cheaper and easier than the legitimate channel.
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If they are “smart and perfectly capable”, why do they need to resort to nefarious and illegal means?
China had a few bad centuries of misrule, civil war, imperial invasions, more civil war, world war, more civil war, and then several decades of totalitarian communism and famine.
So they need to catch up.
Unfortunately, they are now sliding back into misrule, along with demographic collapse.
Re: (Score:3)
What will happen if they eventually develop tech we need?
Considering that their innovation strategy depends heavily on corporate espionage, I'm comfortable knowing that we will NEVER need their technology.
North Korea, probably (Score:2)
The difference between "war" and "competition" (Score:1)
In a war, you attempt to defeat your enemy by destroying their people and their assets.
In a competition, you attempt to succeed against your competitor by performing better than they do.
It sounds like Wired's headline is mislabelling the situation. OTOH if they really think it's a war rather than a competition, they should say why; AFAICT the article does not.
False dichotomy there... (Score:3)
There aren't only 2 choices in life (black or white). And how people label the shades of gray tells you something about them and their goals.
As to your question of 'is this actually war', I think most people would view property or human 'damage' as war. Anything else could be relabeled less evocatively.
In this case it feels like trying to trip the other team early. Or destroy their bike in a triathlon, or something. Remove a tool we get to benefit from, and force them to recreate it themselves or go slo
Re: (Score:2)
I think competition implies a race where both are trying to go forward. War is more a wrestling match where the goal is to pin the opponent and prevent them from competing further. I think war is a very apt description for the shift from competing in and open market to sanctions to cripple the competition.
Frankly, this article reads like propaganda. It would be interesting to see a balanced discussion of who is winning and whether in either case the American public is coming out ahead. Its possible that Chi
Huawei (Score:2)
Their sanctions were supposed to kill Huawei. How well did that turn out?
It took Huawei two years but now they have their own supply network independent of the US.
Some success.
How much does this matter? (Score:2)
Re: (Score:2)
AI is an area where having the latest tech can make a big difference.
TSMC not NVIDIA (and not really Intel either). (Score:2)
"Intel CEO Pat Gelsinger estimated earlier this year that there's a "10-year gap" between the most powerful chips being made by Chinese chipmakers like SMIC and the ones Intel and Nvidia are working on ..."
Who makes NVIDIA's silicon after they design it (heavily optimizing and planning for the creation process details)? It isn't NVIDIA.
And who made most of the 'chiplets' in Intel's latest CPU desktop release? It wasn't Intel. They might assemble them, but we didn't limit how well China can assemble chipl