China‘sโ chipmakers โSpent $38 Billionโ on U.S., Allied Tech Despite Export Controls
WASHINGTON, โคD.C. โ -โ Chinese semiconductorโข manufacturers purchased approximately $38 billion worthโข of โadvanced chipmaking tools and โฃtechnology from โฃU.S. and allied nations in the past year, a figure โฃthat is raisingโ concerns โamong U.S. lawmakers who believe export controls designed to slow China’s technological advancement are failing to achieve their intended effect. Theโข purchases, revealed in newly released data, demonstrate China’s continued โขabilityโข to acquire critical components needed to bolster โขits domestic chip โฃindustry, despiteโข Washington’s effortsโข to restrict access.
The โinfluxโ of technology underscores โa growing debate over the effectiveness of current U.S. policy and highlights the complex challenges in curbing China’s accessโ to cutting-edge semiconductors. Lawmakers on both sides of the aisle are now โขquestioning whether stricter enforcement, expandedโ restrictions, or option โstrategies are โขneeded to prevent China from achieving self-sufficiency in chip production โค- a goal with notable implications for U.S. nationalโ security and economic competitiveness. The continuedโ purchases raise โคfears that China will circumvent restrictions, possibly accelerating its progress in areas like artificial intelligence, military technology, and advanced manufacturing.
According to data compiled by the Peterson Institute for International Economics and reported by โคReuters, China’s importsโ of semiconductor โmanufacturing equipment from the U.S., Japan, South Korea, Taiwan, โขand โคthe โขNetherlands totaledโข $38.13 billion between February 2023 โand February 2024.This figure includes equipment used in โthe production of logic chips, โmemory โchips, and other essential components.
“Theseโค numbers are deeply troubling,” said Senator Bobโฃ Casey, a Democrat on the Senate Foreignโ Relations Committee, in a statement. โข”Despite our best efforts,โฃ China is stillโ able โto โคacquire theโ technology itโค needs to advance its semiconductor industry.We need to take a hard look โขat whether our current export controls are strongโ enough โขand whether they are being effectively enforced.”
The U.S.Commerce โDepartment implementedโฃ sweepingโข export controls in October 2022,aimed at restricting China’s access โฃto advanced chipmaking technology. These controls targeted companies like Semiconductor Manufacturing International Corporationโฃ (SMIC) and prohibited the sale of certain equipment and software withoutโค a license. However, โคloopholes and indirect sales through thirdโข countriesโ have allowedโข China to continue acquiring critical components.
The Netherlands, a key supplier of lithography systems crucial for chipโ production, has also faced pressure to tighten its export controls. ASML, the โคDutch company that dominates the โฃmarket for these systems, hasโ been granted โคlicenses to sellโ some of its less advanced machines toโฃ Chinese customers.
Experts suggest several factors contribute to the continued flow of โtechnologyโ toโข China. These โinclude the complexity of theโ global supply chain,โฃ the difficulty in identifying and intercepting indirect sales, and the economic incentives โฃfor โcompanies to continue doingโ business with the โฃChineseโ market.
“It’s a cat-and-mouse โขgame,” saidโ Emily Benson, a research professor at the Peterson Institute for International Economics. “As the U.S. and its allies โขtighten restrictions, China will find new ways to circumvent them. We need โฃto be constantly vigilant and adapt our policies accordingly.”
The Biden administration is currently consideringโข further measures to strengthen export controls โand addressโฃ the loopholes that have allowed China to continue acquiring advanced chipmaking technology. These measuresโฃ could includeโค expanding the list of restricted items, increasing enforcement โฃefforts, and working more closelyโ with alliesโ to coordinate export control policies. Theโ outcome of these deliberations will likely shape the future โขof the โขU.S.-China technology competition and have significant implications for โคthe global semiconductor industry.
