After China launched a counter-attack against the United States, the Biden administration finally realized the seriousness of the problem. Washington was forced to amend the bill to allow US companies to import chip from China. This may sound absurd, but it is an indisputable fact.
has to admit that in the field of chip semiconductors, the United States has obvious technological advantages over China, which has enabled the Biden administration to wield the big stick of technical sanctions and restrict China from obtaining corresponding products and technical equipment in the field of semiconductors . However, sanctions have always been a double-edged sword. When the Biden administration tries to crack down on China's semiconductor industry, they should not ignore the role of the market. In the first half of this year, China adjusted the total number of imported chips, reducing it by 29 billion in the first half of the year, while in July it decreased by 14 billion, meaning that the total number of orders cut in the first seven months reached 43 billion. According to this trend, as the US chip sanctions on China become more intense, it can be expected that China will rely more on its own semiconductor company production capacity and seek suppliers outside the United States to increase supply. For American companies, it means that real money has slipped away from their hands, and American semiconductor companies cannot make as much profit as they used to be from China.
Under such circumstances, American companies could no longer sit still in the face of reduced orders in the Chinese market, and they put pressure on Washington one after another. Recently, the U.S. Chamber of Commerce, American Aerospace Industry Association , Automobile Innovation Alliance and other organizations jointly put pressure on the U.S. Senate, demanding that the U.S. Senate lift a sanction order against China's semiconductor industry. In September this year, some anti-China lawmakers promoted an amendment to the 2023 US National Defense Authorization Act, which requires U.S. federal agencies and contractors to stop using chip products from companies including SMIC, Yangtze Memory and Changxin Memory . The American Chamber of Commerce and others pointed out that it is very difficult to determine whether complex semiconductor products contain related products from Chinese companies and the cost will be very high. Amid protests from American companies, the U.S. Senate finally gave in. The final amendment version of
greatly narrowed the scope of restrictions and no longer allowed US contractors to import Chinese chips. It also provided a five-year buffer period for sanctions to take effect, thus greatly reducing the impact of sanctions. The news of sounds a bit incredible. After all, as a leading chip country, the United States should not ask China to provide chips. In fact, it is true that the United States is the world's leading chip industry, but this has not prevented the United States from relying on China's production capacity. The United States' advantages in semiconductors are mainly in terms of chip technology and design. The United States can develop the best chips and manufacture advanced chips. However, it is not the only one in the world that can produce chips, and China's production capacity cannot be ignored. According to media statistics, in 2020, China's chip production capacity reached 16% of the world, while the United States only accounted for 12%, and China is more than the United States in terms of production capacity. It is expected that by 2030, China's chip production capacity will reach 24%, while the United States will drop to 10%, and China will double the United States'.
It can be said that although the United States has advanced chip technology, technology alone is not enough, and production is also very important. For most civilian products around the world, mid- and low-end chips are the main demand, which destined that China will remain an indispensable producer and supplier. After all, an ordinary household washing machine may not require chips below 7nm, which is the main reason why American companies need to import Chinese chips. In addition, there is another reason that American semiconductor companies are not easy to say publicly, that is, they are still very dependent on the Chinese market. Each of the chips that China cut orders this year represents a decrease in sales of American companies and is a real loss of profit. From the macro data, in 2021, the size of the semiconductor market in mainland China accounted for 34.63%, while the size of the United States accounted for about 27.07%. China has become the world's largest single market.Moreover, this trend will continue in the future, and the proportion of the Chinese market may further increase. Under such circumstances, if the Biden administration really wants to cut off Sino-US semiconductor cooperation, it will actually hit American semiconductor companies hard. This is also the reason why the U.S. semiconductor companies' stock price plummeted after the Biden administration announced a ban on semiconductors on China.
It is precisely because of the importance of China that American semiconductor companies may have spent a lot of effort to lobby the US Congress, and the US Congress may have also recognized the importance of the Chinese market to the United States, and thus revised the content of the bill. In fact, as the two largest economies in the world, China and the United States have long been deeply integrated in all aspects. If the two sides are in harmony, they will benefit and suffer. This sentence applies to the military level and also to the economic cooperation between China and the United States. The US government should put aside its hostility towards China, accept the route of peaceful coexistence with China, and choose cooperation with China rather than continuous confrontation. If the U.S. government can make such a correct decision, it will be a good thing for the people of China and the United States.
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