In a rapid response to the United States’ latest round of sanctions on its semiconductor industry, China has launched a countermeasure, calling for a boycott of American suppliers. This move marks another chapter in the ongoing tech war between the two global powers, as China seeks to assert its independence in semiconductor production and shield its companies from the effects of increasing international pressure.
A Call for Action Against American Suppliers
Just a day after the U.S. imposed the third wave of restrictions on semiconductor exports to China, four major Chinese industry groups took immediate action. These groups, which represent key sectors such as the internet, automotive, and semiconductor industries, issued a joint statement urging their members to avoid purchasing chips from American companies like Nvidia, Qualcomm, and Intel. This message was clear: “Be cautious” when sourcing from U.S. suppliers. The directive is not just a call to avoid U.S. products but a call for local companies to increase their reliance on domestic sources and explore semiconductor solutions from other countries.
The Internet Society of China, which counts major tech giants such as Huawei, Xiaomi, Baidu, and ByteDance (the parent company of TikTok), has been particularly vocal. They recommend that Chinese companies not only reduce dependence on U.S. suppliers but also enhance cooperation with international semiconductor suppliers. This signals a significant shift in China’s approach to securing its technological future, moving away from American technology and turning inward.
Chinese Semiconductor Firms Prepare for Impact
In addition to the industry groups, Chinese semiconductor companies have already started preparing for the impact of these sanctions. Reports from Reuters suggest that these companies have built up a significant stockpile of critical materials and equipment before the U.S. sanctions were fully enacted. Notably, China has made substantial purchases of chip manufacturing machinery from global leaders like ASML from the Netherlands and Lam Research from the United States prior to the sanctions taking effect. By securing these supplies in advance, Chinese manufacturers believe they will be able to maintain production levels even as the restrictions take hold.
Despite these concerns, companies like Naura Technology, a Chinese semiconductor equipment manufacturer, have stated that their inclusion on the U.S. “entity list”—which restricts American companies from supplying them—won’t have a major impact on their operations. These companies are confident that they have prepared adequately and have the resources to continue functioning without major disruptions in the short term. According to Citic Securities, an investment bank supported by the Chinese government, “The market has already priced in these sanctions, and companies have taken proactive steps, so the actual impact will be limited.”
A New Wave of Sanctions Targets Key Semiconductor Technologies
On December 2nd, the U.S. announced that it would tighten its restrictions on China by targeting semiconductor manufacturing equipment, design software, and high-bandwidth memory, all critical components used in training artificial intelligence tools. These new sanctions are aimed at companies further up the semiconductor supply chain, particularly those that play a vital role in China’s pursuit of technological independence.
Since the start of the technological rivalry between Washington and Beijing, China has been on a mission to become self-sufficient in semiconductor production. This drive has led to massive investments in domestic technology and research, with the long-term goal of reducing its reliance on U.S. and allied technologies. However, the path to full self-sufficiency in semiconductor manufacturing is a long and expensive one, and China is still far from reaching that goal.
The Ongoing Tech Cold War
This latest escalation highlights the broader tensions between China and the U.S., with both nations competing for dominance in emerging technologies like AI, semiconductors, and quantum computing. For China, these sanctions are not just an economic challenge—they represent a direct threat to its national ambitions in the tech industry. The country’s push for technological sovereignty has become more urgent than ever as U.S. restrictions tighten, but Beijing is undeterred, doubling down on its efforts to build a domestic semiconductor ecosystem.
While the immediate effects of these sanctions remain to be seen, the growing divide between the U.S. and China in the tech sector is a clear signal of the shifting balance of power in global technology. As China continues to invest in its own capabilities, the impact of these sanctions may diminish over time, but they will certainly continue to fuel the fire of this ongoing tech cold war.
