Export controls on manufacturing equipment to fabricate advanced node semiconductors – announced in October 2022 by the US Administration and joined by Japan and the Netherlands in March 2023 – are a sea-change in international trade
Rather than targeting sanctions on individual users, the export regimes imposed by the three countries is focused on dual-use – civilian and military applications which justify controls for reasons of security
Blunt in practice, the new regulations do not attempt to track actual use of semiconductors GPUs and equipment, and solely dictate a prohibition to bring them into targeted countries
The magnitude of the disruption plays out in multiple dimensions between China and equipment exporters, in the semiconductor firms themselves, on the US domestic market and under the cloud of (probable) oversupply as new, heavily subsidized manufacturing facilities flourish
- China’s criticism aimed at the Netherlands, home of
, a virtually monopoly on EUV lithography systems which lay the highly complex foundation layers of the most advanced microchips (7 nm, 5 nm and 3 nm nodes), has been sharp - the Dutch General Intelligence and Security Service has emphasized attempts at theft of new technology by espionage on a daily basis
- The loss of sales by the Japanese and American firms subject to the export controls range from 25 to 60% (in the case of Qualcomm
), given the importance the Chinese market used to have - Synergy between the US CHIPS Act ($28 billion for US semiconductor production) and the Inflation Reduction Act (IRA $369 billion to expand the clean energy sector, expected to boost demand for US produced semiconductors) pivots away from global supply chains, impacting the Asian semiconductor industry in Taiwan, South Korea and Japan as well
- With the strongest encouragemens to 'bring the manufacturing home', oversupply of memory chips is likely (and possibly of logic chips as well)
