Retaliatory measures
In terms of likely Chinese retaliation, the Chinese government would have many options. “The US and its allies should be preparing for a likely eventuality of China placing additional restrictions on the rare earth minerals and other raw materials used in the development of semiconductors to prevent the US and its counterparts from advancing further and making it easier for China to catch up even under restriction,” Tsukerman said.
Potentially more importantly, Tsukerman said the US focus on China might prove problematic, as these chip supplies could also come from various other countries. “Working only with the Netherlands and Japan to prevent China from gaining access to equipment is clearly insufficient. China has benefited from loose import-export controls in countries willing to sell that type of equipment produced with Dutch, Japanese, and/or joint US involvement to China with the same result. The coalition should work in tandem to shut down gray zones, possibly imposing secondary sanctions on countries willing to sell such equipment,” she said. “For now, the chipmaking equipment production is dominated by the US-led coalition. It is only a matter of time before other countries develop their own capabilities, BRICS members being the prime example,” she added, referring to the intergovernmental organization founded by Brazil, Russia, India, China and South Africa and more recently expanded to include Egypt, Ethiopia, Iran, and the United Arab Emirates.
Tsukerman said recent US efforts to negotiate with India may be a good move, “India could still be helpful to chipmaking production in any of the expanded BRICS members in many other ways. Meanwhile, such restrictions certainly do not apply to any of the other members, including Saudi Arabia, which is dedicating billions to start a regional semiconductor hub and may receive China’s assistance in exchange for providing China with such equipment.”
