The United States trade war with China is becoming more and more important. One of the main battlegrounds is in technology. The US is cutting off access to essential AI and hardware technology, which China needs in order to catch up to the US in development of core Technology. This lack of US ownership on this important, global technology has major implications for the world balance of power.
For decades, the US and China have had a mutually beneficial partnership. The US was able to focus on innovation and technical expertise, while China had a huge population and cheap labor for US to draw from for any labor intensive problem.
But time have changed, The U.S. cut off access to chips which are essential in all kinds of technology and research. As a result, China has been making its own chips and won't purchase as many supplies from the U.S-based companies. The risks of becoming dependent on another country for vital components of new technology shouldn't go ignored.
China's capability to monitor global internet traffic is a longstanding concern. There has been increased tension between the U.S, and China as Trump blocked Huawei, the major telecom component manufacturer in 2019. The backdoors in 5G towers would have given China power to spy on more of our communications. After Trump banned Huawei many Western countries as well as some Asian countries like Japan and India also banned Huawei components. Trump made this a bipartisan issue when he called out China declaring war on Huawei, which continued with Biden in 2021 who doubled down with the CHIPS act which gave American semiconductor companies $52 billion dollars.
It was essential to start investing in chip startups because new chip startups weren't getting funded. Big chip companies weren't investing in capex. America was falling behind in STEM graduates. Earlier this year, US restricted the sale of Nvidia's A100 and H100 chips. These models boast lots of memory and bandwidth, which means they're great for training larger models. All tech stakeholders want access to these right now.
Graphics cards are only one piece of the puzzle. Somewhere downstream, there's a supply chain that includes TSMC and ASML. TSMC manufactures the actual chips in graphics cards, and ASML makes the machines used to fabricate these chips at TSMC. But with regard to semiconductor sales by China-based companies, Biden enacted a restriction on everything downstream from the graphics card business. The latest bans have cut China off from the entire semiconductor supply chain so now they have to figure out how to make all their parts themselves including ASMs (TSMC and AMD) and SMES (AMD). It's unclear just how long it will take for China to be back up-to-speed.
No comments:
Post a Comment