Source: Buyidao
Is the Biden administration going to use "poisonous tricks" against China?
Interestingly, when discussing the "super-strong" semiconductor export control measures to China that are expected to be introduced as early as the next few days, the most nervous ones are Korean companies.
From Trump The second half of the administration has reached the present, the United States has taken many so-called "hard moves" and "big moves" against China in the IT and semiconductor industries. However, with the decrease in the marginal effect brought by these regulatory measures, the ones that are now more affected are actually those American allies involved in the relevant US equipment and technologies.
For example, South Korea.
Because China is currently the largest trading partner of more than 100 countries in the world, many of the United States' allies have very close trade relations with China. South Korea's IT and semiconductor industries account for a considerable share in trade with China. In this way, South Korea is easily injured by the United States' "hard tricks" against China.
This is actually a true portrayal of the United States' interests and ignorance of allies when it was in poverty.
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" Biden wants to use a harsh trick, don't sell semiconductor containing American technology to China at will." This is the title of an article in South Korea's "Joint Ilbo" on October 6.
This article said that predictions show that the US imposed semiconductor export sanctions on Chinese IT companies Huawei in 2020 will be expanded to China's entire semiconductor industry.
The British " Financial Times " quoted sources as saying that the US Department of Commerce is preparing semiconductor export control measures, not only prohibiting US companies from selling cutting-edge semiconductor-related technologies to Chinese companies or groups, but also strictly restricting companies outside the United States from selling products containing American technology to China.
The Financial Times said that the export control measures are to prevent China from obtaining the semiconductors needed to develop cutting-edge technologies such as artificial intelligence (AI) or supercomputers. " New York Times " also reported that "the Biden administration will mobilize the Foreign Direct Product Rules to impose 'Huawei-style sanctions' on most Chinese companies and research institutes." "Semiconductor companies using American technology will be banned from selling semiconductors to China without the permission of the US government."
The so-called "Huawei-style sanctions" refer to the sanctions taken by the US Department of Commerce to pass the Foreign Direct Product Rules in 2020. At that time, the US Department of Commerce implemented export control measures on the grounds that "Huawei is related to the People's Liberation Army of China." This measure targets all companies around the world. If products are produced using American software or technology, they must be allowed by the US Department of Commerce before they can be exported to Huawei.
In fact, at that time, the Trump administration developed this domineering " long-arm jurisdiction ", which was a special measure to "ban exports to Huawei". Because at that time, Huawei had become one of the largest communications equipment companies in the world, and once surpassed the US Apple in terms of shipments such as mobile phones and Samsung Electronics in terms of the volume of shipments, so the United States felt the threat and began to use hegemonic means outside of "market competition".
The US government believes that the "bottleneck" must control the semiconductor chip industry, because Chinese companies must obtain semiconductor supply from companies such as Samsung Electronics and TSMC.
. Regarding this sanction, the US media is expected to expand to China's entire semiconductor industry. According to the scope of sanctions, it is possible to control the global semiconductor industry's exports to China.
But a coin always has two sides. Under market rules, as the world's largest market and the main production place of many products, if companies in the global semiconductor industry cannot export to China, how many companies will perform worse due to the sharp decline in product shipments? How many companies may even face life and death?
After Chinese companies began to implement relevant bans two years ago in the United States, they have already put a lot of energy into independent research and development and domestic substitution.By creating our own chips and semiconductor components, designing our own production equipment and assembly lines, the impact of the US ban on us will gradually become less important.
Now the Biden administration has no new tricks in technology containment against China. It can only rely on expanding the crackdown and continue to join new Chinese companies on the "restriction list".
For example, recently, the Republican and Democratic parties in the United States have turned their attention to China's chip maker Yangtze Memory Technology Co., Ltd. , putting pressure on the U.S. Department of Commerce to take action to include the company on the entity list. Previously, the report that Apple's iPhone 14 in the United States wanted to install Yangtze River Storage 's 3D NAND flash memory made some US Congress members chagrin, believing that Apple is "playing with fire".
Apple's current NAND flash memory supply mainly comes from South Korea's Samsung Electronics, SK Hynix and Japan's Kioxia Company (Kioxia), formerly known as Toshiba Memory Company. It is estimated that Yangtze Memory is currently the sixth largest NAND flash memory manufacturer in the world, ranking behind Samsung , SK Hynix, Kioxia, Western Digital and Micron (Micron).
In addition, the US Department of Defense issued a press release on the 5th, announcing that the second batch of Chinese companies that were blacklisted because of the so-called "too close relations with the Chinese military", including " DJI Innovation ", which manufactures and sells civilian drones in the world, the world's largest genomics research and development institution " BGI ", and "China Construction Group".
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Under the possible expansion of the ban in the United States, a core question is, can enterprises in allied countries still find large enough markets to replace the Chinese market?
South Korea is worried that this measure may also have an impact on South Korea's semiconductor industry.
According to the Korean industry, Korean companies such as Samsung Electronics and SK Hynix believe that although they will not be affected much in the short term, in the long run, negative impact cannot be ruled out.
An industry person who did not want to be named said, "Semiconductors used in artificial intelligence and supercomputers are currently selling small, and Korean companies that have production equipment in China do not produce such semiconductors, so there will be no direct impact." But if ultra-high performance graphics cards or graphics processors (GPUs) used in data centers and autonomous driving are also targets of limitation, that could have a negative impact.
The report "The Impact and Implications of the U.S. restricting the export of artificial intelligence semiconductors to China" issued by the South Korean Institute of Foreign Economic Policy last week shows that "South Korean companies that produce high-bandwidth memory used in high-performance graphics cards may be hit by export restrictions to China. When the scope of this policy implementation is further expanded, the sales of major customers will become unstable, and the development momentum of high-performance memory may be weakened."
On October 7, Samsung Electronics Group, the pillar of South Korea's semiconductor economy, issued a statement, expecting the company's operating profit in the third quarter to decrease by 31.7% compared with the same period last year. This is the first time in the past three years that Samsung Electronics' quarterly profits have declined year-on-year. Operating profits are expected to reach 10.8 trillion won (about US$7.44 billion) from July to September.
analysts pointed out that it is expected that the price of memory chips will continue to plummet this quarter, resulting in a further decline in Samsung's profits in the fourth quarter. It is estimated that market demand will not recover until early next year.
"Samsung Electronics' third-quarter earnings fell sharply. Is the semiconductor winter coming?" The Korean National Daily reported on the 7th to issue this question. The newspaper believes that the semiconductor industry, as the main force of Samsung Electronics, still performs not optimistic in the rest of the year because global electronic product sales are unlikely to improve due to the slowdown in global economic growth.
Yonhap News Agency's article on 57 directly pointed out that the U.S. government's upcoming stricter equipment export restrictions on Chinese semiconductor companies have caused tensions among Korean semiconductor companies. At present, South Korean semiconductor companies are closely monitoring the level of US semiconductor restrictions on China.
Now, what South Korea hopes is that after the US government announces relevant policy measures, it can deal with "exceptions" with foreign semiconductor companies in China. Currently, Samsung Electronics has semiconductor factories in Xi'an and Suzhou , SK Hynix has semiconductor factories in Wuxi , Chongqing and Dalian. However, these Korean companies are not sure whether the United States will consider South Korea's interests.
Some Korean industry insiders said that China is currently a world semiconductor consumer market that is bigger than the United States. Therefore, if the Chinese market shrinks in the future, the South Korean semiconductor industry will have to be negatively affected.
Park Jae-gun, professor of Rong Fusion Electronic Engineering at Hanyang University in South Korea, believes that when Korean companies in China apply for US approval, they are likely to have to hand over their core business secrets, so the South Korean government and companies must prepare for the future.
The Korean "NEWS 1" website reported that 38% of Samsung Electronics' flash memory, 50% of SK Hynix memory DRAM and 25% of flash memory NAND are currently produced in China. If production equipment cannot be transported to China at all, the business of Korean semiconductor companies in China will become increasingly difficult in the future.
Some analysts believe that the previous US "Inflation Reduction Act" has caused strong dissatisfaction in South Korea due to excluding South Korea's electric car from subsidies. Before the introduction of the new semiconductor sanctions against China, the United States "should recognize the position of allies South Korea." However, this is just wishful thinking from South Korea. I don’t know if the United States will repeat the scene of the Inflation Cut Act.
In fact, American semiconductor companies may first oppose the government's sanctions against China, especially Intel and The American Semiconductor Industry Association has expressed dissatisfaction with the hindrance of exports of Chinese semiconductors, because this may lead to a decline in the international competitiveness of the US's own semiconductor companies.
Most experts believe that the US government's restrictions on China may still be limited to high-end semiconductor manufacturing equipment such as lithography machines, rather than imposing comprehensive restrictions on China's semiconductor imports.
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China repeatedly reiterated that the United States relied on political operations, generalizing the concept of national security, abused export controls, and mobilized state power to suppress and curb enterprises and institutions in other countries, which ultimately harmed others and did not benefit oneself.
China's Ministry of Commerce spokesman Shu Jueting once said in response to the US's ban on exporting high-end chips, "The US's approach deviates from the principle of fair competition and violates international economic and trade rules."
She said that the US move "not only harms the legitimate rights and interests of Chinese companies, but also has a serious impact on American companies."
Under the siege of the United States, China is using the "national strength" to accelerate the localization process of chips to achieve self-sufficiency of semiconductor chips.
"The intensified U.S.-China conflict may further enhance China's scientific and technological independence." South Korea's Asia Times reported on the 7th that some analysts believe that as the United States strengthens its trade and technological war with China, China's willingness to scientific and technological independence is becoming stronger and stronger.
Alexander Treves, an investment expert at the US-China investment bank JPMorgan Asset Management, said that the current game between the United States and China in the semiconductor field further prompted China to reliably in the field of technology, which may be good news for Chinese innovators, and one of the unexpected consequences may be that China achieves self-sufficiency in the entire industry.
Treves believes that in the 1990s, China's manufacturing industry mainly relied on quantity to seize the global market, but now it has entered a real innovation stage. The current situation is different from the past. With the improvement of China's technological level, the United States' technology blockade on China can only enhance China's willingness to be independent in science and technology to reduce its dependence on Western technology.
Treves said that China is accelerating the cultivation of its own semiconductor industry and has also made significant technological progress in the fields of electric vehicles and smartphones. Of course, in some cutting-edge technology fields, China still relies on Western technology. He also gave a positive comment on Chinese technology stock , believing that he should continue to invest in Chinese tech companies this year because these Chinese companies have world-class business models.
and Korean media believe that although Samsung Electronics and SK Hynix are now dominating the global semiconductor memory market, Chinese companies that have rapidly accumulated technical strength are catching up. Especially in the NAND flash memory market, where technical barriers are relatively low, Chinese companies are catching up even more vigorously.
Samsung Electronics, which ranks first in the NAND flash memory market for 20 consecutive years, is currently mass-producing 176-layer flash memory. In August this year, China Changjiang Storage announced the development of 232-layer NAND flash memory, which surprised the global semiconductor industry.
So, once Korean companies are not on the "exception list" of the United States and technically face China's catch-up, the final situation may be very embarrassing.
column editor: Gu Wanquan Text editor: Cheng Pei Title picture source: Shangguan Title picture Photo editor: Shao Jing
Source: Author: Buyidao
