US-China Tech Controls Persist
Persistent US-China tech export controls are creating ongoing uncertainty for global supply chains and standards bodies. While the US recalibrates its policies, China's own controls on strategic materials have matured. Industry leaders like Cerebras' CEO warn that restrictive policies are a strategic barrier to participation in international standards alliances.
The U.S. Commerce Department has steadily expanded its Entity List, adding 140 Chinese firms in December 2024 and another 37 in May 2024, citing risks of diversion to military end-users and support for China's quantum computing programs. These actions target the development of advanced-node integrated circuits and aim to curb China's military-civil fusion strategy. In response, China has implemented its own export permit system for critical minerals. In December 2024, it outright banned the export of gallium, germanium, and antimony to the United States, materials crucial for semiconductor manufacturing and advanced defense systems. This move followed initial licensing requirements put in place in July 2023. The U.S. CHIPS and Science Act provides about $52.7 billion to boost domestic semiconductor manufacturing and research, but with a crucial "guardrail" clause. Companies receiving these federal funds are prohibited from significantly expanding their semiconductor manufacturing capacities in China for a decade. This escalating "chip war" is forcing a realignment of global supply chains, with countries like Japan and the EU seeking to diversify their sources of critical minerals away from China. While the U.S. aims to slow China's technological advancement, some analysts argue the restrictions are inadvertently accelerating China's push for technological self-sufficiency. The conflict extends directly into standards-setting bodies, which are increasingly seen as arenas for geopolitical competition. Nations that influence technical standards can gain significant economic and strategic advantages, making participation and leadership in organizations like the ITU and ISO a core component of national strategy. While facing restrictions, Chinese companies like Huawei continue to be major contributors to 5G standards within bodies like the 3GPP, often collaborating with Western firms like Qualcomm. However, based on patent value, U.S. companies like Qualcomm still hold a leading position in essential 5G technologies. Recent U.S. policy has shown some nuance, with the Bureau of Industry and Security (BIS) clarifying rules to ensure U.S. companies can participate in international standards activities without needing special licenses, even with entities on the Entity List. This move acknowledges the necessity of U.S. involvement in shaping global technical norms. The long-term effects of these controls are creating a more fragmented global tech ecosystem. U.S. firms risk losing significant market share, which funds future R&D, while China is doubling down on building a domestic, self-reliant technology stack, from chip design to fabrication.
