Furious at U.S. efforts that cut off access to technology to make advanced computer chips, China’s leaders appear to be struggling to figure out how to retaliate without hurting their own ambitions in telecoms, artificial intelligence and other industries.
President Xi Jinping’s government sees the chips that are used in everything from phones to kitchen appliances to fighter jets as crucial assets in its strategic rivalry with Washington and efforts to gain wealth and global influence. Chips are the center of a “technology war,” a Chinese scientist wrote in an official journal in February.
The ruling Communist Party is throwing billions of dollars at trying to accelerate chip development and reduce the need for foreign technology.China’s loudest complaint: It is blocked from buying a machine available only from a Dutch company, ASML, that uses ultraviolet light to etch circuits into silicon chips on a scale measured in nanometers, or billionths of a meter.
U.S.-Chinese relations are at their lowest level in decades due to disputes over security, Beijing’s treatment of Hong Kong and Muslim ethnic minorities, territorial disputes and China’s multibillion-dollar trade surpluses. Chinese battery giant CATL supplies U.S. and Europe automakers. Ford Motor Co. plans to use CATL technology in a $3.5 billion battery factory in Michigan.
Hours later, the Chinese government announced an investigation of the biggest U.S. memory chip maker, Micron Technology Inc., a key supplier to Chinese factories. The Cyberspace Administration of China said it would look for national security threats in Micron’s technology and manufacturing but gave no details.
China’s biggest maker of memory chips, Yangtze Memory Technologies Corp., or YMTC, received a 49 billion yuan infusion this year from two official funds, according to Tianyancha, a financial information provider. The scale of spending required is huge. The global industry leader, Taiwan Semiconductor Manufacturing Corp., or TSMC, is in the third year of a three-year, $100 billion plan to expand research and production.
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