China's Chip Boom Defies Export Restrictions

Several members of the U.S. Congress, including Chuck Schumer and John Moolenaar, have been busy recently introducing the Multilateral Alignment of Technology Controls on Hardware (MATCH) Act. In essence, it seeks to tighten export control measures to prevent "adversary countries" from obtaining critical semiconductor manufacturing equipment and technologies from the U.S. and its allies.

The legislation contains several key provisions. First, it requires the U.S. Department of Commerce to identify a list of semiconductor manufacturing equipment that "adversary countries" are unable to produce independently. Second, it would prohibit the sale of such equipment and related technologies to those countries, while also banning the provision of maintenance and support services. Third, the act would designate all chip fabrication facilities operated by several Chinese semiconductor companies — including ChangXin Memory Technologies, Huawei, and Semiconductor Manufacturing International Corporation — as "controlled facilities," effectively cutting off exports, maintenance services, and technical support. Fourth, it seeks to ensure that these restrictions are uniformly implemented by the U.S. and its allies. If allied countries fail to make sufficient progress within a specified timeframe, the Commerce Department would impose unilateral controls on foreign-made products that incorporate U.S. software, technology, or components.

Although the act nominally targets "adversary countries," its primary focus is clearly China. In addition to explicitly naming several Chinese semiconductor companies, statements released by the lawmakers on congressional websites make little effort to conceal the legislation's intent. Schumer, Senate Minority Leader, said "the MATCH Act would stop the flow of advanced semiconductor manufacturing equipment that China desperately needs to build up their own chip industry." Meanwhile, Moolenaar, chairman of the House Select Committee on China, claimed the legislation would "ensure the next decade of growth in chip manufacturing — and the jobs that come with it — happens in the United States and allied countries, not China."

Taken together, the MATCH Act represents an attempt by some U.S. lawmakers to significantly escalate pressure on China's semiconductor sector. The act not only aims to turn the screws on U.S. export controls on semiconductor equipment and technologies destined for China, but also seeks to compel American companies to stop maintenance services for critical equipment already exported to Chinese facilities. Furthermore, it proposes the use of extraterritorial measures to pressure U.S. allies into aligning with Washington's policies and coordinating broader restrictions on China's access to advanced chip technologies.

The proposal of the MATCH Act also suggests that some U.S. politicians have failed to draw lessons from the repeated failures of Washington's semiconductor containment policies toward China in recent years. Attempts to stifle China's chip industry through export controls alone are unlikely to succeed. On March 24, experts including Sujai Shivakumar from the "Renewing American Innovation" project at the Center for Strategic and International Studies, published an analysis arguing that export controls imposed by the U.S. and its allies on advanced semiconductor technologies have only had limited progress in restricting China's development in AI and high-end chips.

Instead, their primary effect has been to hasten the adoption of domestically produced equipment and products within China. The analysis noted, "Ironically, U.S. measures are proving more successful at catalyzing true Chinese chip innovation, as opposed to reverse engineering — manifested in recent achievements in advanced packaging, alternative forms of lithography, and other SMEs, and novel systems architecture."

At the same time, the MATCH Act also reveals the hegemonic logic of some American politicians. Lawmakers promoting the act claim it is intended to create "a level playing field for U.S. companies." Their reasoning is that Washington's export controls were previously stricter than those of its allies, allowing China to purchase large quantities of semiconductor equipment from other countries.

Yet China is the world's largest buyer of semiconductor manufacturing equipment and a major production base for mature-node chips. Forcing U.S. allies to tighten export controls on semiconductor equipment destined for China would inevitably cause economic losses for countries that rely on the Chinese market. It could also disrupt global semiconductor supply chains. In this sense, the "American-style fairness" invoked by these lawmakers would in fact amount to unfairness for both China and U.S. allies, while undermining the stability of the global semiconductor industry.

Ultimately, sanctions and technological blockades are not sustainable for international technological competition. Any legislation or initiatives aimed at obstructing China's semiconductor industry development is unlikely to succeed. Given China's determination and growing capabilities to become semiconductor self-reliant, such efforts will ultimately prove ineffective. It's time some U.S. politicians recognize this and reconsider their approach.

Source: Science and Technology Daily