The escalating trade and technology standoff between China and the US took a new turn as Beijing warned it would respond to protect its tech sector if Washington imposed further restrictions on chip exports. The warning comes amid reports suggesting that the Biden administration is preparing to tighten controls on semiconductor technologies, potentially unveiling new measures this week.
China’s Ministry of Commerce expressed strong opposition to the anticipated restrictions. Speaking at a regular briefing, ministry spokesperson He Yadong criticised the US for what he described as an overreach of national security concerns. He claimed the proposed actions disrupt global industry cooperation and undermine the semiconductor supply chain.
“If the US insists on escalating control measures, China will take necessary actions to resolutely protect the legitimate rights of Chinese enterprises,” said He Yadong.
This comes after an alert from the US Chamber of Commerce revealed the Biden administration is considering blacklisting up to 200 Chinese semiconductor firms. The move would block these companies from accessing American technology and materials critical for chip production.
Sources cited by Bloomberg reported that the new restrictions might target advanced semiconductor equipment and AI memory chips, with companies such as Huawei and Semiconductor Manufacturing International (SMIC) being key focal points. While ChangXin Memory Technologies, a firm pursuing artificial intelligence (AI) memory chip development, might avoid sanctions, more than 100 Chinese companies involved in semiconductor manufacturing equipment production are reportedly under consideration.
The semiconductor industry, a critical battleground in the broader US-China competition for technological leadership, faces heightened uncertainty from these developments. Washington has previously expressed concerns about Beijing leveraging advanced chip technologies for military purposes, prompting a series of measures aimed at curbing its access to cutting-edge innovations.
The timing of these potential actions also intersects with political transitions in the US. As President Joe Biden nears the end of his term, President-elect Donald Trump has pledged tougher trade policies against China. Earlier this week, Trump announced plans for a 10% tariff on all Chinese imports, reigniting fears of another trade war.
In its response, China’s Ministry of Commerce downplayed the effectiveness of such tariffs, stating they would not resolve US domestic challenges.
The US-China chip war has intensified over the years, reflecting broader tensions in their quest for technological dominance. In 2019, the US added Huawei to its Entity List, blocking access to critical semiconductors. Restrictions widened in 2020 to include chips produced with US technology. By 2022, sweeping export controls targeted China’s access to advanced computing chips and tools for manufacturing cutting-edge semiconductors. In 2024, China retaliated with export curbs on materials like gallium, vital for chip production.
Germany set to boost domestic semiconductor development through subsidies
Meanwhile, Germany is gearing up to make substantial investments in its semiconductor industry, signalling a strategic push to enhance Europe’s chip manufacturing capabilities. The German government is reportedly planning to allocate around €2bn in subsidies to support domestic semiconductor development, according to Bloomberg. While the Economy Ministry has not confirmed the exact figure, a spokesperson noted that the funding is expected to be in the “low single-digit billion range.”
This funding initiative aligns with the European Chips Act, a comprehensive programme aimed at reducing Europe’s dependence on Asian suppliers for advanced semiconductors. The Act seeks to strengthen local production through subsidies, facilitating the establishment of major chip manufacturing facilities across the continent. In mid-November, the German Economy Ministry issued a formal call for semiconductor companies to apply for funding. The focus is on projects that contribute to building a resilient and sustainable microelectronics ecosystem within Germany and the wider European Union.
