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China’s top tech regulator last week convened a series of emergency meetings with major semiconductor companies to assess the damage from the Biden administration’s sweeping chip restrictions and pledged support to critical sectors. Since announcing measures to curb China’s technological ambitions, the Ministry of Industry and Information Technology has invited executives from companies such as Yangtze River storage technology and supercomputer expert Lining Information Industry to a closed-door meeting.
MIIT officials were unsure of how to proceed, sometimes asking as many questions as they answered chip makers. Officials declined to provide any remedies, but emphasized that the domestic IT market will provide enough demand for affected businesses to continue operating, said the people, who asked not to be named about the sensitive issue. Many participants argued that U.S. regulation is dooming the entire industry, as is China’s ambition to decouple its economy from U.S. technology.
Yangtze Memory, one of China’s biggest hopes to get into cutting-edge chip manufacturing, warned MIIT that the company’s future could be in jeopardy. AI chip maker He Biren is a prime example of how a Chinese semiconductor start-up went from star to bankruptcy in just a few days. Aiming for a $2.7 billion valuation, the chip designer said in August that he released the first general-purpose graphics processing unit, “setting a new record for global computing power.”
However, Biren had a deal with Taiwan Semiconductor Manufacturing Co. to manufacture the chip using advanced 7-nanometer technology. Now TSMC may have to stop working with startups under Biden’s regulations, and no Chinese company has the ability to replace it.
Biren declined to comment on the talks, but said in a statement that the company is operating as normal and that, after consulting with lawyers, it determined the restrictions would not affect its business. The ministry did not respond to a faxed request for comment.
Rhodium Group analyst Jordan Schneider referred to the Communist Party on Twitter, writing that “Biden’s new chip export bans are a major blow to the Chinese Communist Party’s scientific and technological ambitions.” It is unclear how Beijing will respond to the new restrictions, the most aggressive to date of the Biden administration seeking to block the development of capabilities China views as a threat.
U.S. companies have cut jobs from promising companies such as memory giant Yangtze River, while non-U.S. suppliers such as ASML Holding NV have stopped supporting local customers. Dawning Information, a major Chinese supercomputer maker, and its Hygon division are scrambling to find a replacement for the American silicon they need to continue. A Hygon spokesperson did not immediately respond to an email seeking comment. However, the company said in a filing last week that it is assessing the long-term impact of the sanctions.