Chip War Breaks Out, China Blocks Imports From US

China will ban imports of chips from Micron, the largest US chip maker. It was China's first reaction after the US and Europe had already imposed multiple boycotts. According to Paul Verhagen, a senior technology expert at the Hack Center for Strategic Studies, the chip war has erupted. “This is the first proactive step the Chinese are taking to extricate themselves from the Western tech ecosystem.”

A big step, although in practice it's about chips that, according to Verhagen, are 'very easily replaceable'. Many of these chips are also available in South Korea. In that sense, he thinks the impact of the boycott is less significant than that of the Dutch ASML's EUV machines export association.

Also Read | China is unhappy with the Dutch export ban on ASML

Increase

During a meeting between the G7 countries last weekend, it was agreed to reduce dependence on China. So a reaction from America is expected, Verhagen thinks. In response, China will try to isolate many sectors. But it will definitely increase.

The trade war between the US and China is now becoming more specific, Verhagen thinks. He sees the Chinese move as “a fault line in an ideological conflict, a cold war in technology.”

Micron, America's largest chipmaker, currently generates 10 percent of its sales from China. Verhagen thinks this is 'relatively a lot', especially as China is still a growing economy.

China is buying time

At the same time, China is also likely to shoot itself in the foot. 'It is clear to China that they need to set up their own chip factory. But that's expensive and time-consuming,” says Verhagen. By ignoring American chips, which are also available in South Korea, China is actually buying time.

Also Read | Europe and America disagree on China's economic independence

China also says Western chips should not be used in critical infrastructure. They use the same arguments as the West. “It's the same logic,” says Verhagen. The CEO of OpenAI, the company behind the popular AI chatbot ChatGPT, recently said that democratic values ​​should be integrated into artificial intelligence applications. As China talks about its own great socialist ideals. “It's becoming an ideological conflict.”

Also Read | The G7 nations are meeting next week to discuss artificial intelligence