China turns heritage chips into a commercial weapon

While Trump The administration was trying to make a Tiktok deal during a meeting with China at the end of last week, Beijing was busy adding its bargaining chips to the table. Actual chips, in fact – semiconductors.

Last week, China revealed a series of regulatory measures targeting American chips. More importantly, an anti -aligning investigation into the American Legacy chips that operate everything from cars and refrigerators to washing machines and data centers. Unlike advanced graphics processing units, these chips rarely publish headlines, but they are necessary to operate daily electronics. It is also important, this is also an area in which Chinese companies flared up. By claiming that American companies were flooding the Chinese market with cheap heritage chips, Chinese organizers open the door to customs tariffs that make American products less competing.

Then the anti -monopoly procedure came against Nafidia. Market organizer in China Declare The initial results indicating that the company has violated the obligations it made during its acquisition of the Israeli company Mellanox for 2020. After days, and I mentioned financial times The Electronic Space Administration in China told Budds and Albaba to stop buying the latest NVIDIA chips. Finally, Beijing has also launched an achievement to combat discrimination in American commercial and industrial policy, accusing Washington of unfairly preferring its makers like Intel through Freedom Law subsidies And definitions.

For anyone who follows the past five years of the US-Chinese technology war, all this looks familiar-but upside down. In the past, it was Washington that continued to invent new tools to strangle China’s arrival to advanced semiconductors: overwhelming export controls, definitions, investment reviews, and even the prohibition of employees. Now, after years of defense playing, China shows that it is ready to use the set of tools itself against its main geopolitical competitor. At least, the investigations threatened by American chinese companies can be given other Chinese representatives to negotiate a better deal on Tiktok and definitions.

“The Chinese have always been very good students for the United States. Now we see that they have confidence and development to respond alike,” Dan Wang saysAuthor Breakneck: Chinese pursuit of the future engineer And a research colleague at the Hoover Institute.

New chips on the table

The timing of these investigations is barely mystery. The United States is currently negotiating a deal to maintain TIKTOK operation in the United States – and is partially brought under US control. Unlike Washington, which has been consumed with questions about the best way to organize the application, Beijing is only interested in the fate of Tikhak himself. What matters to the Chinese government is whether it can circulate approval on a possible deal to assign elsewhere, for example on definitions or export controls.

The semi -conductors, which are increasingly important in the event of today, are a major goal. “Beijing is less concerned about the fate of Tiktok than the ability of the semiconductor industry to obtain techniques required to manufacture advanced semiconductors, especially those decisive to train large language models and continue to allow innovation in the artificial intelligence sector,” says Paul Triolo, a partner in the DGA-Albrigle Group to continue in the artificial intelligence sector.

The counter -measures this week indicate that Beijing has set a new point of financial leverage: the huge local market in China. The United States has managed to withdraw export controls because companies in the United States and allied countries still control the advanced technologies required to make semiconductor in the first place: ASML, GPUS in NVIDIA, and preceding TSMC. Beijing has no equivalent strangulation, except perhaps in Rare minerals. But what China has is a vast consumer and manufacturing base. For example, China has the largest car market in the world, which requires billions of imported car chips every year. By noting its willingness to reach this market, it borrows a page from the Tram’s play book.