Selling Chips to Keep China Hooked Is ‘Misguided’ Strategy, Think Tank Expert Says
The notion that the U.S. should continue to sell advanced chips to China to keep the country “hooked” on American semiconductor technology is “deeply misguided,” wrote Ryan Fedasiuk, a fellow with the American Enterprise Institute, in a post for the think tank last week.
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Fedasiuk argued that no major American tech firm has been able to keep China dependent on its technology long-term, pointing to Google, eBay and Uber. Those companies each entered the Chinese market with “cutting-edge technology and global market dominance,” but China eventually developed replacements.
“Selling advanced chips to Chinese customers, including those building supercomputers for the People’s Liberation Army, does not create vendor lock-in,” he wrote. “It alleviates one of [the] few remaining constraints on China’s technological and military power -- one the United States and its allies worked hard to impose.”
Trump administration officials, including Commerce Secretary Howard Luntick, have said the U.S. should sell certain advanced chips to China to keep Beijing “addicted” to that American technology (see 2509250052). But Fedasiuk said the “real choice is not between selling to China or watching Huawei dominate global markets.” Huawei and other Chinese firms will face the same capacity limits that U.S. companies face, and those Chinese firms will likely first “saturate” the Chinese domestic market before moving into foreign ones.
“As it does, we should let China struggle to meet its own inference demand -- not ease the pressure by shipping them U.S.-designed chips,” he said.
Fedasiuk also argued against the claim that U.S. export controls have helped accelerate China’s chip technology progress, calling it “misleading.”
“Of course necessity is the mother of invention. But by this reasoning, we should thank Beijing for its sweeping controls on rare earth exports for jump-starting American mineral processing,” he said. “This is obvious nonsense.”