BEIJING, Dec. 4 (Xinhua) -- The latest round of U.S. export controls aimed at curtailing the semiconductor industry in China will likely produce only a limited immediate effect and in the long run fuel the country's efforts to enhance self-sufficiency instead, analysts said.
The U.S. Commerce Department's Bureau of Industry and Security announced earlier this week stricter controls on semiconductor manufacturing equipment and memory chips to China, with 136 Chinese entities added to its Entity List -- marking an escalation in the U.S. strategy to restrict China's access to critical technology.
While the U.S. government has tightened export controls on China's semiconductor industry over the past years, the new measures appear to be more aggressive, analysts said.
A Ping An Securities research note said the restrictions were more far-reaching than previous rounds as they extend beyond leading chip design and equipment companies to a broader swath of the supply chain, including high-bandwidth memory components and electronic design automation (EDA) software.
However, experts and industry insiders rejected any significant immediate impacts.
Market expectations for these restrictions have already been priced in, CITIC Securities researchers Xu Tao and Wang Ziyuan said, adding that companies have been stockpiling critical components and diversifying supply chains away from the United States.
The U.S. move could ultimately speed up China's push toward domestic alternatives, a process that may take root over the long term, they said.
Several targeted companies have voiced confidence despite the U.S. restrictions, citing their preparedness and focus on R&D.
Hwatsing Technology, a semiconductor equipment manufacturer, said in a statement that it has always prioritized the R&D of core components and established a stable supply chain. Empyrean Technology, an EDA software provider, said that its technology, based on proprietary patents, can ensure independent and reliable operation, and it pledged to "seize the opportunity to expedite the localization of full-process EDA tools."
The United States has been seeking to impede China's semiconductor development. However, rather than weakening China's capacity, the related export controls and technology restrictions have only disrupted the global supply chain and jeopardized the world's benefits at large.
All economies are interdependent in the global semiconductor industry, according to the Global Value Chain Development Report 2023, compiled with the participation of the World Trade Organization.
Semiconductors are produced along a complex and highly globalized value chain, the report said. "As companies in different regions specialize in distinct value-adding segments, a typical semiconductor production process involves most, if not all, of the major economies and the products may cross borders 70 times."
Given the highly globalized semiconductor industry, the U.S. abuse of regulatory measures severely hinders normal economic and trade exchanges among countries, undermines market rules and the international economic and trade order, and poses a serious threat to the stability of the global industrial and supply chains, China's Ministry of Commerce said.
The ministry highlighted that the global semiconductor industry, including U.S. companies, has been severely affected.
Analysts believe the U.S. attempt to fragment the global semiconductor industry and impair China's semiconductor strength will on the contrary lead to a stronger domestic industry in China.
China's vast and rapidly-growing market demand will offer enough momentum for the localization of chip design and manufacturing sectors. Meanwhile, the "In China, for China" strategy of some foreign semiconductor businesses will also reinforce the trend, said a CITIC Securities report.
Major industry associations in China's semiconductor, automotive, internet and telecom sectors have issued statements to encourage the use of chips produced in China by both domestic and foreign firms.
The calls are expected to exert a guiding and leading influence in promoting localization, CITIC Securities analysts said.
China has remained the largest semiconductor market globally in recent years, accounting for nearly 30 percent of the world's total. Government supportive policies from tax incentives to talent cultivation programs have helped the industry survive and thrive despite U.S. restrictions. ■
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