'Chip war' disturbs global industry and supply chains leaving no party unscathed

TSMC and Samsung face new US restrictions on exports of advanced chips to the Chinese mainland. And Tokyo Electron and ASML have been also subject to mounting US pressure to plug all the loopholes in the ban on exports of their high-end chipmaking equipment to the Chinese mainland.

Although the ramping up of the Joe Biden administration's "chip war" was initiated at the height of the US presidential election, the latest pressure applied during the power transition period suggests that the Biden administration expects the next administration to carry on the efforts to build a "chip iron curtain" against the Chinese mainland, just as the Biden administration did when it accepted the baton of the outgoing administration's tariff war against China.

The Biden administration released a large-scale government support policy in September, CHIPS Incentives Program's Funding Opportunity for Commercial Fabrication Facilities, with the aim of catalyzing long-term economically sustainable growth in the domestic semiconductor industry in support of "US economic and national security".

But US allies, such as the Republic of Korea, Japan and the Netherlands, are all complaining about their companies being the ones to bear the cost of the US' "chip war".

And all the signs point to the US continuing its "chip war" against China. That explains why the affected ally companies appear to be much more cooperative this time than before in the face of the latest demand from the Biden administration that they restrict key exports to China. By acquiescing, they hope to leave a good impression for the incoming US administration.

Those taking part in the US' "chip alliance" should bear in mind that there is little likelihood that the next administration will recognize their sacrifice for the US' cause by compensating them for their losses. The incoming US administration, meanwhile, should be aware that unless it is able to help the companies find substitutes for the Chinese mainland, the politically motivated "chip war" will ultimately be unsustainable.

Even if the US could somehow emerge victorious in its "chip war", it would bear a heavy cost as it would not only affect China's tech development, to some extent, but also deprive the vast majority of developing countries of their right to scientific and technological progress and normal development, and subject those countries to forever remain at the low end of the value chain, a colonial practice they will naturally bear a grudge against.

It is to be hoped that the US side can see reason and work in the same direction with China, view China's development in a rational and positive light, seeing it as an opportunity rather than a challenge, and work with China to find a way for the two countries to get along.

The selfish bullying exemplified by the "tech war" undermines the stability of the global industry and supply chains, and will eventually backfire on the US.

China opposes decoupling and supply chain breaking and "small yard, high fence", resists protectionism and unilateral sanctions, and promotes the establishment of a fair, reasonable and transparent international economic and trade rules system.

In addition, China will push technology-related development issues back to the core of the international agenda, so that developing countries can better integrate into the international division of labor and make the fruits of development more and more equitable to benefit the people of all countries.

In the face of the unilateral bullying of sanctions and blockades, China firmly supports all countries in defending their legitimate rights, maintaining the fairness and openness of the international system, enhancing inclusive and coordinated global development, jointly opposing technological blockades, and jointly resisting decoupling and disconnection. Containing China will not solve the US' own difficulties.