When U.S. Chip Sanctions Become China’s Launchpad
Tehran - BORNA - Over the past several years, Washington has imposed strict measures on semiconductor exports in an attempt to slow China’s technological rise. Yet this policy has not only limited America’s share of the global semiconductor market but also revealed that the U.S. may be losing the initiative to Beijing.
A key player in this battle is Taiwan’s TSMC, the world’s leading producer of cutting-edge chips. Under U.S. regulations, TSMC is required to halt exports to blacklisted Chinese companies. Huawei, for instance, was effectively cut off from global supply chains in 2019. These restrictions, however, pushed Chinese firms such as SMIC to accelerate their domestic capabilities.
Although SMIC still lags behind TSMC currently producing at the 7nm level compared to TSMC’s 3nm signs of meaningful progress are evident. Reports indicate that SMIC has successfully designed 5nm chips for Huawei’s Mate 60 Pro, a move in 2023 that directly challenged Washington’s confidence in the deterrent power of its sanctions. Still, mass production of advanced chips in China remains a difficult and costly journey.
Nvidia’s Difficult Comeback in China
Meanwhile, Nvidia, the American chip making giant, is struggling to retain its market share in China. The company recently confirmed that it is negotiating to secure export licenses for its H20 chips to continue operating in this critical market. Yet, this time Beijing has shown little enthusiasm for Nvidia’s products and has even raised national security concerns.
Chinese officials worry that Nvidia’s chips could contain backdoors enabling remote access to sensitive data. On top of that, critics in China have questioned the efficiency of these new processors and their compatibility with environmental regulations. On July 31, China’s Cyberspace Administration summoned Nvidia, demanding clarification on potential risks linked to the H20 chips.
Such developments highlight how U.S. export restrictions have paradoxically strengthened China’s domestic semiconductor sector, reducing reliance on Western technologies. America’s efforts to contain China’s chip industry appear to have accelerated Beijing’s drive for self-sufficiency. While companies like Nvidia scramble to re-enter the Chinese market, domestic competitors despite facing major challenges are steadily narrowing the technological gap with the West.
About the author: Fateme Moradkhani covers technology, surveillance, and AI ethics for Borna News Agency, with a focus on global cyber power and digital militarization.
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