Chip War: Taiwan Joins U.S. Against Huawei and SMIC, Limiting Beijing's AI
- Gabriele Iuvinale
- 14 giu
- Tempo di lettura: 4 min
Taipei has intensified its restrictions on Chinese technology companies Huawei Technologies Co. and Semiconductor Manufacturing International Corp. (SMIC), officially including both and several of their subsidiaries in an update to its list of "strategic entities" in the high-tech commodities sector. This updated list, published on the website of Taiwan's International Trade Administration on Saturday, June 14, represents a significant blow to the two companies, which are at the forefront of China's efforts to develop cutting-edge technologies for artificial intelligence chips.
The change, which was not publicly announced, mandates that Taiwanese companies obtain government approval before exporting to the listed entities. This action follows similar sanctions imposed by the United States, which had previously designated Huawei as a "threat to national security." In June 2020, the U.S. Federal Communications Commission (FCC) identified Huawei and ZTE Corporation, along with their affiliates, as companies posing a national security threat, prohibiting the use of universal service support for equipment or services from them. The U.S. also placed SMIC and some of its subsidiaries on its "entity list," significantly restricting their ability to acquire foreign technology.
These new restrictions could severely limit Huawei and SMIC's access to crucial Taiwanese technologies, materials, and equipment for semiconductor manufacturing. Such components are vital for producing AI semiconductors, like those made by Taiwan Semiconductor Manufacturing Co. (TSMC) for companies such as Nvidia. The updated list also includes Huawei units in Japan, Russia, and Germany. This latest move by Taipei could thwart previously reported efforts by some Taiwanese companies to assist Huawei in developing a secret network of chip manufacturing plants in southern China, further impeding Chinese companies' ambitions in the semiconductor sector.
It's very important to emphasize that these restrictions, along with similar American measures, will likely keep China stuck at the 7nm technology node, at least until it develops its own Extreme Ultraviolet (EUV) lithography capabilities. EUV machines are essential for producing advanced chips (below 7nm) and are exclusively manufactured by the Dutch company ASML, which is subject to strict export controls. Although SMIC has demonstrated the ability to produce 7nm and even 5nm chips using Deep Ultraviolet (DUV) lithography and complex techniques like Self-Aligned Quadruple Patterning (SAQP), this approach is generally more time-consuming, expensive, and less efficient than EUV. This makes it challenging for Chinese companies to compete internationally without massive state support.
Taiwan had previously imposed blanket bans on the export of chip-making equipment, such as lithography machines, to China. However, until now, it had not specifically targeted individual Chinese technology companies on its entity list. TSMC, a key supplier to Apple and Nvidia, halted supplies to Huawei in 2020 due due to U.S. export controls.
China's AI Progress Despite Blockades
Despite these limitations, Chinese AI continues to advance. Recent developments in Huawei's chips, particularly with the new Ascend 910D processor, have shown an acceleration towards Beijing's technological self-sufficiency, especially in the AI sector.
China's successes in this area stem from a formidable combination of factors: substantial government investments, chip smuggling, exploitation of loopholes in U.S. export control coverage, completion of domestic equipment transfers, recruitment of experienced talent from leading international companies, reverse-engineering of foreign technologies, leveraging state-sponsored economic espionage, and fostering genuine domestic innovation. All these elements contribute to the pursuit of the "self-sufficiency and self-strengthening" goal for AI, as recently reiterated by President Xi Jinping.
Given the events of the past year, there's no doubt that China has narrowed the AI development gap with the United States. The Chinese AI startup DeepSeek particularly garnered global attention in January by launching an AI reasoning model that, it claims, was trained with less advanced chips and is more cost-effective to develop than its Western rivals.
Beijing has also made strides in software engineering for infrastructure. DeepSeek's announcement, however, primarily challenged the assumption that U.S. sanctions were significantly hindering China's AI sector amid intense geopolitical technological rivalry, and that China was lagging behind the U.S. after OpenAI's groundbreaking ChatGPT launch in late 2022.
Even with these restrictions, China's Yangtze Memory Technology Corporation (YMTC) has managed to produce high-density memory chips comparable to those made by its Korean competitors.
China is also innovating in how to more effectively utilize less efficient chips. Earlier this year, a Chinese research team won an award at a prestigious international conference for doing just that: using less powerful chips to outperform high-end hardware.
"We must continue to strengthen basic research, concentrate our efforts on mastering key technologies such as high-end chips and basic software, and build an independent, controllable, and collaborative AI basic hardware and software system," stated Xi. He added that AI regulations and laws should be accelerated to create a "risk alert and emergency response system, to ensure that AI is safe, reliable, and controllable."
These restrictions come amidst rising tensions, with Taiwan's President Lai Ching-te earlier this year calling China a "hostile foreign force" and introducing measures to counter infiltration. China, which claims Taiwan as its territory and has threatened unification by force, has not yet officially responded to the new measures.
These moves by Taiwan and the U.S. highlight Taiwan's central role in technology geopolitics and the growing importance of semiconductor supply chain security for economic and national security. Any disruption to chip production in Taiwan, whether due to geopolitical tensions or natural disasters, would have catastrophic consequences for industries worldwide. The U.S. desire to reduce dependence on Taiwan as the sole hub for advanced semiconductor manufacturing, while supporting its security, is further shaping the global technology landscape. Simultaneously, China is redoubling its efforts to stimulate domestic innovation in the chip sector and achieve self-sufficiency, a race that will determine which country leads the development and application of artificial intelligence.
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