hist78
Well-known member
"The difference between the US and Taiwan is that the US can restrict, but Taiwan can halt. When the world’s most dangerous chokepoint in chip supply is no longer passive, it holds the power to redefine the global technological hierarchy."
For over a decade, the United States has been in a chip cold war with the familiar arsenal. The blacklisting, export control, and extraterritorial rules (all the staples of Washington’s worn-out playbook) were meant to help China deny access to critical technologies and stop the emergence of technical capabilities. The food stall never came.
In response, restrictions have become increasingly serious. According to a report by the Wall Street Journal, the US government is currently weighing more restrictions in China, including revoking the exemption that allows global chipmakers to access US technology in their China-based businesses.
Meanwhile, China continues to move forward. Local tech giant Huawei was blacklisted in 2019. China’s largest chip maker, Smic, continued production despite sanctions, shocked the industry in 2022 by using advanced 7-nanometer technology to manufacture chips. According to Consultancy TechInsights, the leap from 14 nanometers took just two years. It’s faster than Taiwanese semiconductor manufacturers and Samsung.
Most impressive is the Ascend 910C, produced by Huawei’s latest AI chip, Smic. The chip began moving Nvidia’s products in China, bringing Nvidia’s local market share from 95% to 50%. Nvidia CEO Jensen Huang called US export control a failure in China, losing billions of dollars in sales to American companies.
But while US policies continue to dominate the headlines, the most structurally important move in the chip war will come from Taipei, not from Washington. Taiwan has blacklisted China’s leading high-tech groups Huawei and Smic. Under existing regulations, Taiwanese companies must obtain a license before shipping their products to newly listed entities.
This shows a dramatic departure from Taiwan’s historical approach. For years, it maintained a careful balance and supplied chips to the world – producing more than 90% of the world’s most sophisticated chips through TSMC, but avoiding direct conflict with China. Part of that suppression came from economic necessity. China remains Taiwan’s biggest trading partner. Approximately a third of Taiwan’s $152.7 billion chip output will go to China and Hong Kong.
The other parts were strategic attention. Taiwan has been on a diplomatic tightrope for a long time. The direct conflict with China, particularly through unilateral sanctions, risked causing economic or military retaliation. However, Taipei’s strategy is changing as China’s military pressure on Taiwan is intensifying and the technological sector is beginning to fuse more closely with state power.
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Taiwan’s new entity list will not immediately disrupt Chinese companies. Many Taiwanese companies have local subsidiaries beyond their jurisdiction in mainland China and Taipei. Additionally, existing contracts will not be reverted. But its importance lies in what makes it possible for future possibilities. Taiwan’s movement is at the heart of the chip supply chain, which means it has unique weight. Unlike the US, Taiwan directly controls the companies that supply China’s chip inputs, so there is no need to persuade them to comply with other countries.
Timing is particularly sensitive for China. Huawei’s AI chip is considered a rival to Nvidia, but its progress is far more vulnerable than it appears. For example, Huawei’s latest MateBook Fold Computer runs on chips created using Smic’s 7-nanometer technology, according to TechInsights. This was once a milestone in China’s domestic chipmaking, but there are chips in three generations of the 2-nanometer process, which TSMC is expected to start mass production later this year.
Until now, despite sanctions, that level of technology has been sufficient to keep China competitive. Beijing can be compensated by deploying far more old chips, backed by cheap energy and brute force scaling of production. But that workaround has lost traction as more advanced chips become standard in an unauthorized world.
The lag is expanding and may be too wide to close Taiwan’s chip infrastructure and critical inputs without access. More than a technical barrier, it is the broader chipmaking ecosystem that Taiwan has built for over 40 years and cannot be replicated.
The difference between the US and Taiwan is that the US can limit it, but Taiwan can stop it. If the world’s most dangerous chokepoint in chip supply is no longer passive, it has the power to redefine the global technology hierarchy.
benchmarkbeat.com
For over a decade, the United States has been in a chip cold war with the familiar arsenal. The blacklisting, export control, and extraterritorial rules (all the staples of Washington’s worn-out playbook) were meant to help China deny access to critical technologies and stop the emergence of technical capabilities. The food stall never came.
In response, restrictions have become increasingly serious. According to a report by the Wall Street Journal, the US government is currently weighing more restrictions in China, including revoking the exemption that allows global chipmakers to access US technology in their China-based businesses.
Meanwhile, China continues to move forward. Local tech giant Huawei was blacklisted in 2019. China’s largest chip maker, Smic, continued production despite sanctions, shocked the industry in 2022 by using advanced 7-nanometer technology to manufacture chips. According to Consultancy TechInsights, the leap from 14 nanometers took just two years. It’s faster than Taiwanese semiconductor manufacturers and Samsung.
Most impressive is the Ascend 910C, produced by Huawei’s latest AI chip, Smic. The chip began moving Nvidia’s products in China, bringing Nvidia’s local market share from 95% to 50%. Nvidia CEO Jensen Huang called US export control a failure in China, losing billions of dollars in sales to American companies.
But while US policies continue to dominate the headlines, the most structurally important move in the chip war will come from Taipei, not from Washington. Taiwan has blacklisted China’s leading high-tech groups Huawei and Smic. Under existing regulations, Taiwanese companies must obtain a license before shipping their products to newly listed entities.
This shows a dramatic departure from Taiwan’s historical approach. For years, it maintained a careful balance and supplied chips to the world – producing more than 90% of the world’s most sophisticated chips through TSMC, but avoiding direct conflict with China. Part of that suppression came from economic necessity. China remains Taiwan’s biggest trading partner. Approximately a third of Taiwan’s $152.7 billion chip output will go to China and Hong Kong.
The other parts were strategic attention. Taiwan has been on a diplomatic tightrope for a long time. The direct conflict with China, particularly through unilateral sanctions, risked causing economic or military retaliation. However, Taipei’s strategy is changing as China’s military pressure on Taiwan is intensifying and the technological sector is beginning to fuse more closely with state power.
Recommended
Taiwan’s new entity list will not immediately disrupt Chinese companies. Many Taiwanese companies have local subsidiaries beyond their jurisdiction in mainland China and Taipei. Additionally, existing contracts will not be reverted. But its importance lies in what makes it possible for future possibilities. Taiwan’s movement is at the heart of the chip supply chain, which means it has unique weight. Unlike the US, Taiwan directly controls the companies that supply China’s chip inputs, so there is no need to persuade them to comply with other countries.
Timing is particularly sensitive for China. Huawei’s AI chip is considered a rival to Nvidia, but its progress is far more vulnerable than it appears. For example, Huawei’s latest MateBook Fold Computer runs on chips created using Smic’s 7-nanometer technology, according to TechInsights. This was once a milestone in China’s domestic chipmaking, but there are chips in three generations of the 2-nanometer process, which TSMC is expected to start mass production later this year.
Until now, despite sanctions, that level of technology has been sufficient to keep China competitive. Beijing can be compensated by deploying far more old chips, backed by cheap energy and brute force scaling of production. But that workaround has lost traction as more advanced chips become standard in an unauthorized world.
The lag is expanding and may be too wide to close Taiwan’s chip infrastructure and critical inputs without access. More than a technical barrier, it is the broader chipmaking ecosystem that Taiwan has built for over 40 years and cannot be replicated.
The difference between the US and Taiwan is that the US can limit it, but Taiwan can stop it. If the world’s most dangerous chokepoint in chip supply is no longer passive, it has the power to redefine the global technology hierarchy.
Taiwan has raised Cold War ante over chips - Benchmark Beat
Unlock Editor’s Digest Lock for Free For over a decade, the United States has been in a chip cold war with the familiar arsenal. The blacklisting, export control, and extraterritorial rules (all the staples of Washington’s worn-out playbook) were meant to help China deny access to critical...
benchmarkbeat.com