The news continues to misrepresent export control regulations as some sort of ban. As I explained in my previous post, the restrictions are merely to secure mega profits for a select few licensed exporters while kicking out their competitors. In particular, preferentially giving license to American corporations at the expense of American allies.
The “loopholes” in the restrictions are also never explained. We’re just supposed to take it face value that “cHiNa iS BreAkInG tHe RuLeZ!!1”. From my reading of the US Dept of Commerce’s official Export Administration Regulations, the only “loophole” is that exporters can apply for a license and then they can export. The continuous portrayal of China as a bad faith trade partner is a propaganda tactic to cover up their own bad faith profit driven dealings—wanting to profit from trade with China while directing the American public’s anger at China for the hollowing out of the American chip industry.
The decline of imports is subtly portrayed as a win for the cover narrative that the sanctions are presumably to slow down or stop altogether China’s access to chips. In reality, this is probably due to China building up domestic chip manufacturing—I’ll credit the article for mentioning that revenue from domestic manufacturers rose 39% in the first half of 2023 compared to a year earlier. By presenting it this way, they confuse readers into thinking that this loss (the decline of exports to China) is actually a win.
Interesting ideas but it doesn’t take into account the extremelly expensive AI chips, and the new AI designed chips as well to a lesser extent I guess.
If they can make enough money with the AI chips, or if the government invests heavily, they could keep their position for longer, but if it doesn’t make them enough or if they just distribute this to the shareholders they could indeed face a lack of sales leading to falling income and possible crashes.
Truly specialized chips for AI have yet to be fully explored. And China will surely be one of the countries to invent them, with the sanctions in place meaning the government will have to prioritize designing new chips.
It looks like US hasn’t really been doing much of an investment into subsidizing domestic fabs
Meanwhile, China is already making domestic 7nm chips for AI https://www.digitimes.com/news/a20230717PD210/china-7nm-ai-chips.html
and has a huge domestic market https://asiatimes.com/2023/12/china-to-meet-ai-market-demand-with-local-chips/
My expectation is that China will rapidly catch up and will start outpacing western chip companies. It’s also worth noting that as western chip market slumps, China will be able to poach a lot of the people. This has already been happening with TSMC and Samsung researchers and engineers moving to China because they got really attractive job offers.