US arbitrary tech blockade cannot stop China's progress

Major US media have once again hyped the US' restrictions on the sale of Dutch tech giant ASML Holding's advanced chip equipment to Chinese firms and boasted the measure's impacts on China's technological progress.

The Biden administration is trying to make sure ASML does not sell to China the extreme ultraviolet (EUV) lithography system, a $150-million machine that is essential to making advanced chips in everything from cutting-edge smartphones and 5G cellular equipment to computers used for artificial intelligence, The Wall Street Journal reported on Saturday.

The New York Times earlier claimed that, by keeping "the most complicated machine" out of China's reach, the US policymakers seem to have found a key lever to stop China from building a completely self-sufficient supply chain in semiconductor technology.

However, it is clearly not the case. Just as ASML Chief Executive Peter Wennink said, Washington's anti-China tech blockade is a bad idea that will backfire. The export controls against China will not only fail to stop its technological progress but also hurt the US economy.

Even amid the global chip supply shortage, the US' obstruction of a potential deal between ASML and Chinese companies, an arbitrary move that violates a basic principle of free market economy, will only have a limited impact on China.

The ASML's EUV lithography system is mostly used to produce advanced chips of 7nm, 5nm, or 3nm, which only account for 17 percent of the total market. Given that the other 83 percent of the demand is for chips of 10 nm and above, China has broad space for innovation. Now it's of greater significance for China to use mature technology to improve chips' performance, according to Wu Hanming, academic of the Chinese Academy of Engineering and dean of the School of Micro-Nano Electronics of Zhejiang University.

In the immediate term, it is not an easy task for China to achieve technology independence in advanced chip equipment, but if the US continues its mistaken technology blockade, China will only ramp up its efforts. Under the blockade and containment by the US, China has decided to promote its independent research and development capacities. From an industrial perspective, when the market drive is strong enough, progress in chip equipment will come sooner than expected. It is estimated that China will be able to achieve a key breakthrough in the development of deep ultraviolet (DUV) lithography systems in less than three years, and in EUV in less than five years.

What is certain is that if the US stubbornly insists on going its way and continues to impose a technology blockade and containment on China, only its economy will be hurt. According to estimates from the US Department of Commerce, If American business with China on semiconductors is cut off completely, it will probably cost anywhere between $80 to $100 billion in sales and 125,000 jobs in the US.

The author is the Chief Executive of Chinese telecoms industry news website, cctime.com.