Shares in Chinese tech giants and chipmakers slumped as investors were spooked by new U.S. export control measures aimed at slowing Beijing’s technological and military advances.
The Biden administration published a new sweeping set of export controls at the end of last week that could amount to the biggest shift in U.S. policy towards exporting technology to China since the 1990s.
The new U.S. export rules include a measure to cut China off from certain semiconductors made anywhere in the world with U.S. equipment. Some of the measures will take effect immediately.
The new measures sent shares for tech giants Alibaba Group and Tencent down on Monday.
Experts said the new rules will have a broad impact, slowing China’s efforts to develop its own chip industry and advance commercial and state research involving military weapons, artificial intelligence, data centers, and many other areas that are powered by supercomputers and high-end chips.
The export controls also come at a time when the global chip industry is already facing major issues after demand has tumbled post-Covid for a range of tech, including computers, smartphones, and other electronic devices.
The most immediate impact is likely to be felt by Chinese chipmakers.
Under the new regulations, U.S. companies must cease supplying Chinese chipmakers with equipment that can produce relatively advanced chips – logic chips under 16 nanometers, DRAM chips below 18 nm, and NAND chips with 28 layers or more – unless they first obtain a license.
This will affect the top contract chipmakers in China, who are the Semiconductor Manufacturing International Corp and Hua Hong Semiconductor. It will also affect state-backed leading memory chipmakers Yangtze Memory Technologies Co and Changxin Memory Technologies.
Analysts said the new measures will hobble the Chinese chip sector and will scupper numerous growth plans and potentially set back innovation in both the East and the West.
Be the first to comment