US wants 'democratic alliance' against Chinese microchip industry

Japan, South Korea, Taiwan and Europe asked to adhere to restrictions on the export of semiconductor technology to China. With the 'Chip Alliance' Biden aims to create a supply chain that excludes Beijing. The example of Huawei's 5G ban.

Washington (AsiaNews) - The United States wants to create an alliance between the "hi-tech democracies" to limit the progress of China's microchip industry: an attempt to block the development of China's military programme, and another chapter in the "tech war" between the two powers.

Washington is asking allies such as Japan, South Korea, Taiwan and Europe to adhere to its restrictions on the export of advanced semiconductor technology to China. On 7 October, the US government announced broad bans on the sale of microchip production tools and software for their design to Chinese entities. It also introduced restrictions on the ability of US citizens to work for or do business with companies in China.

According to Nikkei Asia, the US controls 12% of the world market for semiconductors, used in all electronic systems. Taiwan and South Korea hold 20%; Japan has 15%.

US technology companies, like those in Japan, South Korea and Taiwan, have shown reservations about Washington's moves: at a time of global crisis, they do not want to lose the rich Chinese market, especially as regards the supply of machinery for chip production.

Last spring, the US proposed a 'Chip Alliance' with Japan, South Korea and Taiwan. The intention of the Biden administration is to create an autonomous supply chain in the microchip sector with the involvement of allies and friendly countries - and the exclusion of China.

The initiative remains to be defined, but Washington expects the participants to contribute to efforts to 'isolate' China in the microchip field. Observers point out, however, that the recent bans will have little impact on Chinese military development: the limits cover the market for the most sophisticated chips, while Beijing's weapon systems still use less advanced semiconductors.

The Chinese leadership certainly cannot overlook the challenge posed by Washington. The financial collapse of Huawei after the bans imposed by the US on its 5G products, later followed by other countries, is a warning to Beijing.

RED LANTERNS  IS THE ASIANEWS NEWSLETTER DEDICATED TO THE CHINA. TO RECEIVE A WEEKLY UPDATE EVERY THURSDAY, CLICK HERE.

• red
• laterns