China has opened a case at the World Trade Organization to protest the American government’s plan to limit semiconductor exports to China. The action, according to the People’s Republic, poses a risk to the reliability of international industrial supply networks. The United States, though, insists that the choices were made for national security grounds.
China takes legal actions within the WTO framework as a necessary way to address our concerns and to defend our legitimate interests.[Restrictions imposed by the U.S. threaten] the stability of the global industrial supply chains.
-Chinese Ministry via Reuters
The Chinese semiconductor and supercomputer industries were subject to a number of restrictions from the United States in October. The fact that all of the penalties have a negative effect on China’s semiconductor industries makes it unclear which sanctions the nation intends to resist.
According to Nikkei Asia, the situation was made more complicated by an agreement between Japan and the Netherlands to impose harsher regulations on WFE exports to China. It will still take years for China’s chip manufacturers and suppliers of wafer fab equipment to catch up to their rivals from Japan, the Netherlands, and the United States, despite the country reportedly preparing to inject $143 billion in subsidies into its chip industry to help it endure new restrictions.
Additionally, the United States forbids chip manufacturers from selling Chinese processors developed with American technology that would allow American firms to create supercomputers with performance of more than 100 FP64 PetaFLOPS or more than 200 FP32 PetaFLOPS in a space of only 41,600 cubic feet. This restriction impacts businesses like AMD, NVIDIA, Intel, and even China’s own Biren Technology because almost all modern CPUs and GPUs are produced or developed utilising American technologies.
Given the importance of semiconductor manufacturing, high-performance computing, and artificial intelligence to China as a whole, all restrictions should be removed. It is not yet apparent if it will be successful in getting the WTO to order the United States to lift any of the penalties.