China’s top industry bodies have advised domestic companies to seek alternative silicon sources due to supply chain issues caused by US sanctions. The advice comes as Beijing bans exports of rare earths used in semiconductor manufacturing, which could lead to a shortage of critical materials. Industry leaders suggest expanding cooperation with chip companies in other countries and regions, and using chips manufactured in China.
The move is part of China’s efforts to counter American policy, including the extension of sanctions by the Biden administration to prohibit exports of high-bandwidth memory tech necessary for AI systems. Chinese silicon may not match that from US-based stalwarts like Nvidia and Intel, but it could eventually become easier to obtain. The ban on rare earths exports is expected to have a significant impact on China’s semiconductor industry, potentially leading to inferior products such as laptops and servers.
However, some jurisdictions are willing to facilitate gray market trading, which may help Chinese companies acquire sanctioned tech. With the US silicon supply in short supply, Chinese organizations must consider alternative options to ensure the “security” of their local industry. The advice from China’s top industry bodies suggests a shift towards domestic chip manufacturing and cooperation with other countries.
Source: https://www.theregister.com/2024/12/05/china_stop_buying_us_chips_advice