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| China wants to keep pace with the US semiconductor industry |
As the United States puts pressure on Chinese tech giants, China is trying to develop the domestic semiconductor industry.
However, analysts said: Beijing will face great challenges in promoting the domestic chip industry and semiconductor a very important part of consumer electronics.
As more devices become smart and connected to the Internet, they become more important in new areas (such as the automotive industry). China hopes to become a major player in this field.
The situation in China is that his company's access to major chip components could be disrupted as well as the ability of local chip makers to purchase and manufacture semiconductor technology.
Without semiconductors, China cannot become a great technological powerhouse. Unless China has strong semiconductor manufacturing and maintenance skills, Chinese tech companies like Huawei may not be able to move forward.
The trade war exposed China's dependence on foreign chips, the central role of the United States in the supply chain, and the complexity of the supply chain.
Earlier this year, Washington revised a rule requiring foreign manufacturers who use US equipment to make chips with a license before selling semiconductors to Huawei.
There is no indication that the United States will grant these licenses.
Although Huawei, the world's largest smartphone maker, is developing its chips through a subsidiary called HiSilicon, these components are made by a Taiwanese company (TSMC).
(TSMC) uses chip making equipment manufactured by US companies in this process. Therefore, Huawei will be banned from purchasing TSMC chips after September 15th. Due to US sanctions, this Chinese company has few options in the world.
The US government is also considering blacklisting or entity listing for the largest Chinese chip maker, SMIC.
This restricts US companies that export technology to Chinese companies. SMIC may not be able to obtain the equipment to make more advanced chips because its technology is several years behind TSMC and Samsung.
The supply chain in the semiconductor industry is very complex, not just the companies that make the chips, but the companies that design and manufacture the tools that enable them to make them first.
Taiwan and South Korea are at the forefront of industrialization, but the US dominates when it comes to design tools.
At the same time, the Dutch company (ASML) is building a machine that uses what's known as ultraviolet (EUV) technology to produce advanced chips like those produced by TSMC and Samsung.
Reuters reported earlier this year that the United States had pressured the Dutch government to stop selling ASML machines at the lowest wages. ASML said last month that it was awaiting an export license from the Dutch government to ship its equipment to China.
The problem for China is its dependence on foreign equipment for making chips, and as the United States increasingly pressures the Chinese technology sector, it will be difficult for China to maintain the market. The domestic chip industry associated with the United States. .
China is said to be unable to catch up, despite full access to advanced tools and materials. Without these tools, China is still lagging behind.