The US-China chip war intensifies as the Biden administration announces new export curbs on advanced chips, targeting China’s military. This move has significant implications for companies like Advanced Micro Devices and Intel, as well as Nvidia, and has sparked concerns about the impact on the US semiconductor industry.
The US-China chip war highlights the increasing importance of critical materials like gallium and germanium, with China being the dominant player in their global supply chain. This raises concerns about “resource nationalism” and the hoarding of critical materials by governments, which can have far-reaching environmental and geopolitical consequences.
The Biden administration’s recent announcement to cut off more exports of advanced chips to China has escalated the ongoing chip war between the two countries. The move specifically targets China’s military and includes two made-for-China chips from Nvidia. The goal is to prevent China from importing advanced semiconductors or equipment that could be used for military purposes.
However, this decision also makes it more difficult for companies like Advanced Micro Devices and Intel to sell their existing or new chips to China. As a result, the shares of all three companies fell on Wall Street following the announcement.
Nvidia has already stated that the new export restrictions will block the sales of two high-end artificial intelligence chips it created for the Chinese market, as well as one of its gaming chips. This will undoubtedly have a significant impact on the company’s operations and revenue.
The Semiconductor Industry Association, which represents 99% of the US semiconductor industry by revenue, has expressed concerns about the new measures. They argue that the restrictions are “overly broad” and risk harming the US semiconductor ecosystem without effectively advancing national security. Instead, they believe that these measures may push overseas customers to seek alternatives outside of the US.
Unsurprisingly, the Chinese embassy has firmly opposed these new restrictions, which also target Iran and Russia. China is a major player in the global supply chain of critical materials like gallium and germanium. It produces 80% of the world’s gallium and 60% of germanium, according to the Critical Raw Materials Alliance (CRMA) industry body. These materials, known as “minor metals,” are not typically found on their own in nature but are often by-products of other processes.
The US is not the only country imposing chip technology export restrictions on China. Japan and the Netherlands, home to key chip equipment maker ASML, have also implemented similar measures. This constant tit-for-tat between the world’s two largest economies raises concerns about the rise of “resource nationalism,” where governments hoard critical materials to exert influence over other countries.
The US-China chip war has significant environmental implications. As the demand for advanced chips and semiconductors continues to grow, so does the need for critical materials like gallium and germanium. The dominance of China in the global supply chain of these materials raises questions about environmental sustainability and resource management.
As governments impose export restrictions on critical materials, it becomes crucial to consider the environmental impact of their extraction and production. The responsible and sustainable sourcing of these materials should be a priority to avoid ecological damage and ensure a resilient and environmentally conscious supply chain.
In conclusion, the US-China chip war and the new export curbs on advanced chips highlight the growing importance of critical materials like gallium and germanium. The dominance of China in their global supply chain raises concerns about “resource nationalism” and the environmental implications of hoarding critical materials. As the chip war intensifies, it is crucial to prioritize responsible sourcing and environmental sustainability in the production of advanced chips and semiconductors.
