The chips produced by Chinese companies. (PHOTO: VCG) 

By QI Liming

It's been a year since the CHIPS and Science Act was signed into law on August 9, 2022 by U.S. President Biden. The move saw some Western media calling it "an act of war," and said the Biden administration aims to block China from the future of chip technology.

Meanwhile, in this time China's chip manufacturers are endeavoring to fill the market vacuum created by the U.S. and its allies' export restrictions. The nation's universities and research institutions have also conducted a lot of research in the field of chip manufacturing technology, providing a strong technical foundation for the industry's progress.

The New York Times Magazine described chips as being the lifeblood of the modern economy, and also the driving force behind the innovations poised to revolutionize life over the next century, like quantum computing and artificial intelligence.

The U.S. government has announced its intent to cripple China's ability to produce, or even purchase the highest-end chips. "The key here is to understand that the U.S. wanted to impact China's AI industry," said Gregory C. Allen, director of the Wadhwani Center for AI and Advanced Technologies at the Center for Strategic and International Studies in Washington, adding that "The semiconductor stuff is the means to that end."

The Biden administration thinks it can preserve his country's technological supremacy by cutting China off from the supply of advanced computer chips. But in reality, the U.S. and its allies' chip industry were forced to become part of this futile attempt to contain their products.

Business leaders of semiconductors from the U.S., the Netherlands and South Korea have claimed that decoupling the chip supply chain is practically impossible. Where there is purchasing and selling, there is business, and the booming business will in turn boost sci-tech R&D.

The Biden administration has generalized the concept of "national security" and blocked the benign development of the semiconductor industry. In order to get more votes in the upcoming election, it has carried out an illogical crackdown on China, ignoring the petitions from the global chip industry.

The defects of the CHIPS and Science Act make it difficult to achieve the vision promised by the Biden administration. By now, the subsidies and tax incentives promised by the U.S. government have not been put in place. The U.S. Semiconductor Industry Association (SIA) sent petitioning representatives to lobby the government, saying, "Allowing the industry to have continued access to the China market, the world's largest commercial market for commodity semiconductors, is important to avoid undermining the positive impact of [the Chips and Science Act]."

In addition to fiscal and commercial issues, setting up chip-making capacity in-house is easier said than done. Mass media has reported that Taiwan Semiconductor Manufacturing Company (TSMC) is pushing back the start of 4nm chip production at its new facility in Phoenix, Arizona, to 2025, blaming labor shortages.

Chris Miller, author of the book Chip War and an associate professor of international history at the Fletcher School at Tufts University, said that the wider chip industry, meanwhile, is a web of mutual interdependence, spread all over the planet in highly specialized regions and companies, its feats made possible by supply chains of exceptional length and complexity, which is in other words, for globalization.

"It's hard to imagine how the capabilities they've reached would be possible without access to the smartest minds in the world all working together," said Miller. And yet it is this same interconnectedness that makes the industry vulnerable to regulations like those the Biden administration is pursuing.