https://www.benzinga.com/government...itated-overnight-what-annihilation-looks-like China's Semiconductor Industry 'Decapitated Overnight': What 'Annihilation Looks Like' byAJ Fabino, Benzinga Staff Writer October 14, 2022 3:24 PM | 3 min read ZINGER KEY POINTS Sanctions imposed by Biden prevents businesses from sending cutting-edge processors required to run efficient AI algorithms to China. The sanctions require any U.S. citizen working in the Chinese semi industry to quit their jobs, or be at risk of losing U.S. citizenship. The Biden administration unveiled a comprehensive strategy last week to move the U.S. forward and hold China back in the production of advanced semiconductors, virtually eliminating China's semi industry overnight, escalating the high-tech battle with Beijing. “Every American executive and engineer working in China’s semiconductor manufacturing industry resigned yesterday, paralyzing Chinese manufacturing overnight,” wrote Twitter user @lidangzzz, translated by Rhodium Group analyst Jordan Schneider. “One round of sanctions from Biden did more damage than all four years of performative sanctioning under Trump.” What happened: Yangtze Memory Technologies Co, a company owned by China, and 30 other semiconductor companies in China have been put to the Unverified List by the Bureau of Industry and Security, a division of the U.S. Department of Commerce. Sanctions imposed by the Biden administration also prevent businesses from sending the cutting-edge processors required to run or train the most efficient AI algorithms to China. The extensive new regulations are intended to keep China's AI industry in the stone age as the U.S. and other Western nations advance. The limitations also prohibit the export of chip manufacturing tools and design software and forbid the top silicon fabs in the world, such as Taiwan Semiconductor Mfg. Co. Ltd. and Samsung, from producing cutting-edge chips for Chinese businesses. Why Did American Execs Resign? One of the provisions of President Joe Biden's executive order is that any U.S. citizen or green card holder working in China cannot work in the Chinese semiconductor industry or risk of losing American citizenship. According to the @lidangzzz thread, it is not just affecting Americans. “Everyone from Lam Research Corporation at Yangtze Memory left today, and on the 12th the Applied Materials, Inc. folks will leave as well — not just Yangtze, but also HLMC [Shanghai Huali Microelectronics], ICRD’s [Shanghai Integrated Circuit R&D Center Co], Jiading fab, [and] Hefei’s CXMT DRAM fab.” ASML Holding NV, one of the world’s most important semiconductor toolmakers, told U.S. employees to stop servicing Chinese customers. “The starting point for this round of sanctions is to go all the way up the food chain and ensure the elimination of all American products and technologies from the entire ecosystem,” the thread reads. Why It Matters: Taiwan Semi reduced its forecasts for capital expenditures and Applied Materials cut its outlook for revenue and profit following the sanctions. Both businesses said the demand for semiconductor products would decline. Chinese officials described the U.S. limitations as a significant step intended to thwart the development of the nation. The decision might have wide-ranging effects, such as restricting the development of artificial intelligence that underpins algorithms for driverless vehicles, and other risks. "This is what annihilation looks like: China’s semiconductor manufacturing industry was reduced to zero overnight. Complete collapse. No chance of survival," the thread continued. Benzinga's Take: While the new sanctions are a sharp blow to China's semi industry, U.S. leverage could fade eventually as Shenzhen, China's innovation powerhouse, intensified efforts to develop its domestic chip sector by giving significant subsidies and financial incentives to semiconductor companies registered in the city.
This is one of the most consequential action taken by a US president in time of peace against another nation. I have never heard of US citizens being threatened with losing their citizenships if they don't immediately stop working in the semi conductor industry in China. The federal government can't even require citizens to wear masks ffs! I can imagine the hundreds of lawsuits from US citizens forced to leave China. The repercussions of this action from China will be swift. China could require all Chinese citizens working in stem research or labs to leave the US at once and the consequences could be catastrophic for the US research industry, unless they are given priority US citizenship. Of course, this action is 20 years too late. Just like Europe will overcome Russian energy embargo and find alternate distribution networks to starve Russia of foreign revenues for many years to come, China will overcome this embargo by developing their own tech and eventually compete with the US. It's not a matter of if but when.
Oh, I thought you were going to say for the US it was time to stop their dependence on Chinese labor and forced tech transfers while we looked the other way on their encroaching authoritarianism. Brutal day for semis. Revenues going byebye.
they do and they have. It's becoming a nat sec issue https://www.nytimes.com/2022/07/28/us/politics/us-china-semiconductors.html
Here is what I think will happen, the Chinese will totally disregard any US IPs or licensing agreements they signed up for, white label everything without paying loyalties, and keep the production going. White guys and gals will come home, ethnic Chinese may decide to stay. It will be chaotic and messy, just like when Lucent, Bell Labs, Nortel, Nokia, etc went down. People will find their new places, juniors get promoted. Tech products price hikes are coming.
I believe in trade and inter dependency to avoid military conflicts. That's what the US has been selling the world since 1950. Should we tell Chinese how to behave in their house? Dunno, how would we like Chinese telling us how to behave at home. We'd give them the finger and do what we do best, shoot one another in the name of freedom. Tech transfer is the rule if you want to make millions from cheap Chinese labor. Don't want it? Don't do business in China! It's like we telling Chinese companies to follow our accounting rules..Don't like it? Don't list in the US. Yes, their encroaching authoritarianism is a concern. We have some responsibility with it, just like we encouraged Ukraine to seek democracy. But I'm no fan of China's or anyone else's bullying. Their hierarchical culture and face saving obsession coupled with their sudden dominant position in the world is not reassuring at all. Like teens who suddenly realize their strength and capacity to instill fear in people. Their agressive posturing and lack of humility may lead us down a dangerous road.
The US and other Western companies affected of course demand compensation from the US govt. In the end it's as usual the US taxpayer that has to pay the consequences of such idiotic actions of this senile idiot in the WH. US can not compete fairly, so it must use such desperate dirty actions & tricks... It's futile, man! Only a loser would act as unfairly as such. US already is a loser How big must the fear be by this sicko USA soon to be overtaken by China... USA is not aware that it's alone, as nobody else will support it, except some bribed "friend" tiny countries, ie. bought vassals... I'm sure this sicko idea comes from the overlords (the puppet master) of the US govt, the "Globalists"...
Wait, let me make sure I understand this correctly: the US wants to reign in a totalitarian regime by threatening to strip Americans off their CITIZENSHIP if they don't quit their jobs? So American Chinese would be left only with their Chinese citizenship. What about Americans who have no other citizenship? They become stateless? How is it even possible to have citizenship revoked, whether someone was born American or naturalized? Let me get this straight, so you can murder, rape, be the most extremist racist, mass shoot homosexuals or whatever other crime you could possibly imagine and you won't ever lose your American citizenship. Yet, now you happen to work at a Chinese semiconductor company and they want to take your citizenship away? If this is not an April fools then this makes me lose my last little bit of respect for this shit nation. Even @d08, who usually sides by default against Russia and China must be having serious issues with that. Only shows how desperate and in decline the US really is. I predicted this in many threads, which is that the US will start foul play when it realizes that it's decline can't be stopped and that fair means of competition don't work anymore. Perfect example of a case of unpleasant player of "Mensch Ärger Dich Nicht". If true this would be the most repulsive and anti democratic decision and treatment of own citizens in the entire American history. Even war deserters or draft dodgers did not lose their citizenship.