China condemns US Decision to Restrict Semiconductor Firms, Warns of Global Supply Chain Disruption
Beijing, China – August 26, 2023 – Chinese authorities have sharply criticized a recent move by the US government to revoke “validated end user” (VEU) status from three major semiconductor companies operating within China. The decision, impacting Intel Semiconductor (Dalian) Co., Ltd., samsung China Semiconductor Samsung co., Ltd., and SK Hynix Semiconductor (China) Ltd., is being viewed by Beijing as a politically motivated act that threatens the stability of global semiconductor supply chains.
A spokesperson for China’s ministry of Commerce stated that the US Department of Commerce’s action is “inappropriate” and urged Washington to promptly rectify the decision. The spokesperson emphasized the deeply interconnected and globalized nature of the semiconductor industry, built over decades of market forces and corporate investment.
“Washington’s decision appears to be motivated exclusively by it’s own interests,” the spokesperson said, adding that utilizing export controls as a political tool could have “considerable negative impacts” on the worldwide production and supply of semiconductors.
The Chinese government is demanding the US not only reverse its course but also actively work to “preserve the safety and stability of industrial and supply chains” at a global level. Beijing has vowed to take necessary measures to protect the “legitimate rights and interests” of its companies affected by the US action.
This dispute arrives as China’s top commercial representative is currently in Washington for official talks, aiming to “promote stable and enduring growth in bilateral economic relations.” The visit underscores China’s desire for continued dialog and cooperation with the US, despite escalating tensions in the technology sector.
Implications & Analysis:
This latest development highlights the ongoing strategic competition between the US and China in the critical semiconductor industry. the US has been increasingly focused on restricting China’s access to advanced chip technology, citing national security concerns. though, China’s response underscores the potential for retaliatory measures and the risk of further disruption to a sector already grappling with supply chain vulnerabilities.the revocation of VEU status effectively limits these companies’ ability to receive certain US-origin technologies, possibly impacting their production capabilities and contributing to broader market instability. Analysts predict this move will likely escalate tensions and could prompt China to accelerate its efforts to achieve self-sufficiency in semiconductor manufacturing.
Keywords: China, US, Semiconductors, Trade, Export Controls, Supply Chain, Technology, Intel, Samsung, SK Hynix, VEU, Ministry of Commerce, Washington, Beijing.
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