Chinese Semiconductor Industry Condemns U.S. Export Restrictions, Citing Global Supply Chain Disruption and Economic Coercion

China's Semiconductor Industry Faces New U.S. Export Restrictions: Global Repercussions Loom

In a new wave of export restrictions announced on December 2, the United States has targeted China's semiconductor industry with a sweeping set of regulations, intensifying the ongoing technological rivalry between the two nations. These measures, which add over 140 Chinese companies to the export restriction list, have sparked significant concern and backlash from China’s semiconductor industry and government bodies. The latest restrictions mark another flashpoint in the effort to control critical semiconductor technology and could shape the future of global supply chains, innovation, and international relations.

China Semiconductor Industry Association Condemns New U.S. Export Restrictions

On December 3, the China Semiconductor Industry Association (CSIA) issued a strong response to the new export restrictions announced by the U.S. government on December 2. The CSIA argued that these actions are undermining long-held principles of fairness and non-discrimination in the global semiconductor industry. According to the CSIA, the new restrictions violate the spirit of the World Semiconductor Council (WSC) and the principles of fair trade established by the World Trade Organization (WTO).

The statement emphasized that the U.S. government’s unilateral actions have already caused real damage to the global semiconductor supply chain. The CSIA highlighted that the arbitrary changes to trade regulations have disrupted the stability and security of the supply chain, affecting companies across the world, including in the United States. The association voiced its deep concern and strong opposition, warning that these restrictions will increase the costs of the global semiconductor supply chain while hurting both American and Chinese companies.

In today’s deeply interconnected world, the CSIA said, such actions harm the interests of both Chinese and American enterprises, and negatively impact the global semiconductor industry's collaborative efforts. The association urged other countries to ensure that their companies become reliable suppliers of semiconductor products and called on the Chinese government to support stable development for trusted partners.

U.S. Adds Over 140 Chinese Companies to Export Restriction List

The new U.S. export controls introduced on December 2 add more than 140 Chinese companies to the restricted trade list, which includes semiconductor manufacturing equipment and electronic design automation (EDA) tools, among other critical items. In response, the Chinese Ministry of Commerce denounced the restrictions, describing them as acts of economic coercion that violate international market rules and order.

The Ministry argued that the United States has consistently misused the concept of national security to justify these restrictions, characterizing them as examples of unilateral bullying. It stressed that such measures not only harm China but also threaten the stability of the global semiconductor supply chain, impacting companies worldwide, including those in the United States.

The Ministry of Commerce also emphasized that China remains committed to protecting its legitimate interests and will take necessary steps to counteract these restrictions. Multiple Chinese semiconductor companies have also publicly responded, noting that while these measures pose challenges, their overall impact remains controllable.

Responses from Key Chinese Companies

Prominent semiconductor firms have started assessing the impact of the restrictions. Huada Jiutian, a major player listed on the entity list, confirmed that it is proactively responding to the situation and that its current operations remain stable. The company aims to capitalize on the opportunity to accelerate the localization of EDA tools to reduce reliance on foreign suppliers.

Meanwhile, Wingtech Technology—also included in the restrictions—stated it is evaluating the potential impact of these measures but emphasized that it expects the effect to be limited. Notably, the company indicated that only products originating from the U.S. are subject to the restrictions, and a significant portion of its operations relies on overseas manufacturing facilities that are less directly affected by these controls.

The China Automotive Industry Association (CAIA) also expressed firm opposition to the restrictions, stressing that they would disrupt the stability of the automotive chip supply chain—a critical component of the automotive industry, particularly as the demand for electric vehicles continues to surge. The CAIA has recommended that Chinese automotive companies exercise caution when sourcing American chips, as their reliability has now come into question.

Escalating Technology Tensions and Industry Impact

The new U.S. export controls underscore an intensifying technology war between the United States and China, with potentially far-reaching consequences for the global semiconductor industry. Semiconductors are the backbone of modern technology, powering everything from consumer electronics to advanced artificial intelligence systems. The semiconductor supply chain is inherently global, with different countries specializing in raw materials, design, manufacturing, and assembly.

With these new restrictions, the United States is attempting to maintain its lead in high-tech innovation while stymying China’s growing ambitions. However, this approach comes with significant risks for U.S. companies, which could lose access to the lucrative Chinese market, experience increased production costs, and face growing incentives for Chinese firms to develop indigenous alternatives.

For China, these sanctions are a clear attempt to hinder the country’s push toward technological self-reliance. While it will face challenges in accessing certain advanced technologies, China’s strategy is to double down on domestic research and development and forge collaborations with non-U.S. suppliers in Europe, South Korea, and Japan to reduce dependence on American technologies.

Automotive Sector Faces New Challenges and Opportunities

The Chinese automotive sector is particularly vulnerable to the new export restrictions, given the increasing importance of semiconductor chips in modern vehicles. Electric vehicles (EVs) and autonomous driving technology require a growing number of high-performance chips, and the demand is only expected to increase as more advanced automotive technologies become mainstream.

The CAIA highlighted that a traditional internal combustion vehicle typically needs around 600-700 semiconductor chips, while an electric vehicle can require up to 1,600 chips. For more advanced autonomous vehicles, this number rises to about 3,000 chips. As demand for chips in the automotive industry continues to grow, Chinese companies are stepping up efforts to localize chip production. Both car manufacturers and technology companies are investing heavily in chip development, with firms like GAC, SAIC, Huawei, and Horizon Robotics making significant progress.

Chinese companies are also working to establish industry standards to support this shift. The Ministry of Industry and Information Technology aims to establish 30 key automotive chip standards by 2025, with a broader goal of achieving coverage for over 70 applications by 2030. This push to establish standards is seen as crucial for reducing reliance on foreign suppliers and enhancing China’s automotive supply chain resilience.

A Look Ahead: The Future of Global Semiconductor Supply Chains

The ramifications of the U.S. export restrictions are likely to be felt for years to come. In the short term, U.S. companies like Nvidia, AMD, and Lam Research may face immediate revenue pressures due to reduced access to the Chinese market, while Chinese companies will prioritize collaborations with partners outside the United States to minimize the impact.

In the medium term, China’s investments in domestic semiconductor manufacturing are expected to start yielding results, particularly in mid-tier chips and application-specific integrated circuits. As China continues to invest aggressively in its semiconductor capabilities, new partnerships with non-U.S. players—including suppliers in Europe and East Asia—will help mitigate the effects of the sanctions.

In the long term, the industry could witness the emergence of two separate ecosystems—one led by the United States and its allies, and the other by China. This potential bifurcation of the semiconductor industry could lead to inefficiencies, increased costs, and a divergence in technological standards, ultimately impacting innovation and the development of next-generation technologies.

Conclusion: A Defining Moment for Global Technology

The latest round of U.S. export restrictions against China underscores the growing complexity of the global semiconductor landscape. These measures, while aimed at safeguarding U.S. national security, risk fragmenting the international semiconductor ecosystem, driving up costs, and diminishing trust across borders. China, for its part, is accelerating its efforts toward technological self-sufficiency, a move that could reshape the global industry over the next decade.

As both countries navigate this escalating rivalry, the global semiconductor industry stands at a crossroads. The future will depend on how companies, governments, and international bodies respond to this evolving challenge—whether they seek collaboration and innovation or drive deeper divisions in the pursuit of technological supremacy.