China escalates chip war with new curbs against US
China is escalating its chip war with the United States by imposing export controls on the overseas sales of gallium and germanium, elements essential to making semiconductors, CNN Business reported. China's trump card is seen as the counter-attack to potential US tightening of [its] AI chip ban. «We see this as China's second, and much bigger, countermeasure to the tech war, and likely a response to the potential US tightening of [its] AI chip ban,» said Jefferies analysts as cited by CNN Business.
They said that sanctioning one of America's biggest memory chipmakers, Micron Technology (MU), in May was the first. According to CNN Business, Gallium is a soft, silvery metal commonly used to produce compounds that are key materials in semiconductors and light-emitting diodes. Meanwhile, Germanium is a hard, greyish-white and brittle metalloid that is used in the production of optical fibres that can transmit light and electronic data.
The trade war started in October when the Biden administration unveiled a set of export controls banning Chinese companies from buying advanced chips and chip-making equipment without a license. Chips are vital for everything from smartphones and self-driving cars to advanced computing and weapons manufacturing. US officials have talked about the move as a measure to protect national security interests.
And to make it more effective the US needed other key suppliers, located in the Netherlands and Japan, to join them and they did. China eventually retaliated. In April, it launched a cybersecurity probe into Micron before banning the company from selling to Chinese companies working on key infrastructure projects.
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