Several Chinese chip companies recently placed on a sanctions list by the US expect little impact on their activities. The company Empyrean, specialized in software for the development of semiconductors, said it wanted to break away from foreign suppliers more quickly.
Jiangsu Nata Opto-Electronic Materials, a supplier of raw materials for chip production, pointed to well-stocked material warehouses. Local replacements will be found for foreign suppliers.
Analysts disagree on the economic impact of tightened US restrictions on technology exports to the People’s Republic. The current measures are aimed at China’s Achilles heel, warned Martijn Rasser, director of the industry service Datenna, which specializes in the Chinese technology sector. The semiconductor manufacturers there are highly dependent on machines from foreign suppliers such as ASML from the Netherlands, Applied Materials from the US or Nikon from Japan.
Declining investments
Due to the American embargo, experts from investment bank Jefferies expect that investments by Chinese chip companies will collapse by 30 percent next year to 35 billion dollars (33.3 billion euros). Because there are some exceptions for suppliers from the Netherlands and Japan, ASML reiterated its 2024 targets despite the new sanctions.
Other experts pointed out that many Chinese companies had submitted orders in anticipation of new sanctions. Imports of chip production machines rose by a third to $24.12 billion in the first nine months of 2024, according to local customs authorities. According to analyst Jeff Koch of research agency SemiAnalysis, the additional measures had no more impact on the activities of Chinese companies than previous measures.
A boycott of foreign chips could have consequences for AMD, Intel and Nvidia
To slow China’s technological and military rise, the US has increasingly restricted exports of certain goods to the People’s Republic in recent years. The government in Beijing has repeatedly criticized this approach as “coercion” and “abuse of power.” A few hours after the recent tightening of the US embargo, it banned the supply of the metals gallium and germanium, which are important for chip production, to the US.
At the same time, several Chinese industry associations called for purchasing only locally produced computer chips in the future, because American products are “no longer safe.” This could have consequences for AMD, Intel and Nvidia, for whom China has been an important market. A ban on the supply of its memory chips to key Chinese industries caused US company Micron to see a drop in sales in the low double digits.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
