A summit gathering between China and the US leaders, Xi Jinping and Donald Trump, sparked a wave of speculation worldwide. However, its biggest, almost immediate consequences are felt in a sector that defines our future – in a planet of advanced technologies.
The yearly suspension of US export restrictions, agreed during talks, sheds fresh light on the global supply chain and the complex relation between powers. At the heart of this storm was the Dutch company Nexperia, a key player in the chip market, whose destiny became a symbol of technological war.
Saga Nexperii: Hostage in global game
Imagine a company that produces “brains” for our cars. This is what Nexperia does – it delivers the essential chips, tiny integrated circuits, which manage everything in today's cars, from engine to safety systems. Although the company is based in the Netherlands, its owner is Chinese technology giant Wingtech. That's where the problem begins.
At the end of September, the Dutch government, citing the old 1952 bill, took control of Nexperia, accusing her board of mismanagement. This decision came only a day after the United States announced the tightening of export rules. The fresh rule, known as the “rule of 50%”, prohibited exports to companies which at least 50% belong to entities from Washington's black trading list. Since Nexperia is wholly owned by Chinese Wingtech, which is on this list, the Dutch takeover was seen as an effort to defend the company from upcoming US sanctions.
However, after the Xi-Trump meeting, the situation changed by 180 degrees. The US agreed to suspend “rule 50%” per year. As 1 analyst put it, the request for a Dutch takeover abruptly “disappeared”. This decision brought relief to global companies, specified as Volkswagen, who feared the paralysis of production due to the deficiency of key components. The past of Nexperia shows how much politics at the highest level affects global supply chains and how technology companies become pawns in geopolitical competition. This communicative besides shows how the overzealousness of political pawns can bring them results which disagree greatly from assumptions based on very shortsighted calculations.
Chinese Long March towards technological independence
Regardless of the turmoil around Nexperia, China does not slow down pace in pursuit of a strategical goal: technological self-sufficiency. Beijing has invested tremendous resources for years to become independent of abroad technologies, especially in key sectors specified as semiconductors.
The latest example of this strategy is the launch of a “state” semiconductor investigating platform for the automotive manufacture in Shenzhen. This advanced center, equipped with 13 specialized laboratories, aims to full find the production of advanced car chips and strengthen supply chain security. This is simply a key component of China's upcoming 15-year plan to build a resilient and independent technological economy.
Breakthroughs in memory and materials production
Chinese ambition doesn't end with car chips. The national leader in memory production, ChangXin Memory Technologies (CXMT), announced the launch of mass production of advanced LPDDR5X DRAMs.
What does this mean for the average user?
These memories are a key component of modern smartphones and artificial intelligence (AI) systems, providing them with velocity and efficiency. CXMT's entry into this market, dominated so far by giants specified as Samsung, is simply a immense step forward in reducing the technological gap.
Moreover, scientists from the University of Beijing announced a breakthrough in lithography technology – 1 of the most hard and most crucial stages of chip production.
Imagine that chip production is like taking pictures on an unimaginably tiny scale. Lithography is simply a process of “exposing” patterns on a photosensitive material called a photoresist. Chinese scientists have developed a way to visualize how photoresist molecules behave during this process. This discovery can importantly reduce defects and open the way for the production of even more advanced chips, eliminating 1 of the largest “narrow throats” of the Chinese semiconductor industry.
Nvidii dilemma and black AI chip market
US-China talks besides have a direct impact for the future of NvidiaThe world's most valuable chip company. Its graphics processors (GPUs) are absolutely crucial for the improvement of artificial intelligence. American export restrictions have made Nvidia's share of the Chinese marketplace fell from 95% to zero. The company's CEO, Jensen Huang, expressed optimism about the anticipation of returning to this immense market, nevertheless president Trump stated that the latest AI chips, known as Blackwell, were not the subject of negotiations during the his meetings with Xi Jinping in Korea.
Meanwhile, request for advanced chips in China is so immense that the black marketplace is booming here. Shenzhen Police broke up a syndicate that falsified imported chips, polishing and changing markings on old, utilized layouts. Moreover, it is estimated that Nvidia chips of at least a billion dollars were smuggled after the restrictions were tightened to China. This desperate search for abroad technology shows how much Chinese companies inactive request it to drive the AI revolution, while working hard to make their own alternatives.
Recent developments on the technology front show that global competition for dominance in semiconductors is more fierce than ever. Although political decisions can bring temporary thawing, China's strategical objectives stay unchanged. This country is determined to build its own independent technological ecosystem, reaching further breakthroughs and challenging its current leaders. The war on chips continues, and its consequence will specify the world's technological and economical map for the coming decades.
Source: China Future Tech newsletter, South China Morning Post, by Karen Chiu.
Leszek B. Glass
Email: [email protected]
© www.chiny24.com
