In this undated file photo, a technician tests chips at a tech firm in Hefei, Anhui province. (PHOTO BY XIE CHEN / FOR CHINA DAILY)
Washington's reported plan to announce new restrictions on China's access to US chip technology will severely disrupt the global semiconductor sector, which has already been struggling with risks of fragmentation amid the COVID-19 pandemic, experts said on Thursday.
The Chinese mainland imports more than US$300 billion of semiconductors annually, and most, though not all, major US semiconductor companies pull in at least 25 percent of their sales from the Chinese mainland market, according to an article by Christopher Thomas on the Brookings Institution's website
Their comments came after Bloomberg reported on Tuesday that the US Commerce Department is expected to roll out a package of rules this week governing which semiconductor technologies can be exported to China, including making earlier guidance given to specific companies generally binding.
ALSO READ: China opposes US restrictions on shipping of AI chips
Bai Ming, deputy director of international market research at the Chinese Academy of International Trade and Economic Cooperation, said the reported move would be part of a broader push by Washington to cut China off from the rest of the world in chip supply chains, a move that would be unrealistic and have painful results.
"Such an attempt will deal a big blow not just to US chip companies, but the global semiconductor industrial chain too, given China's weight as the world's biggest chip market and its growing presence in semiconductor manufacturing," Bai said.
ALSO READ: China strongly opposes US chips bill
Bloomberg quoted anonymous sources as saying that the new measures are expected to formalize export restrictions on technology that produces advanced semiconductors, prohibit the sale of tools for logic and memory chip production in China, and restrict access to chips used in supercomputing and artificial intelligence.
"Those moves would harm global chip companies, which bank on China for revenue growth," said Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center at Zhejiang University's International Business School.
The Chinese mainland imports more than US$300 billion of semiconductors annually, and most, though not all, major US semiconductor companies pull in at least 25 percent of their sales from the Chinese mainland market, according to an article by Christopher Thomas on the Brookings Institution's website.
"Access to this massive market is essential to the success of any globally competitive chip firm today and in the future," the Semiconductor Industry Association, a Washington-based group that represents the US semiconductor industry, said in a report.
READ MORE: US chips in another bill in its zero-sum game
Jensen Huang, founder and CEO of Nvidia Corp, also said at a recent news conference that cooperation between China and the US is beneficial to the world, after Washington restricted the major US semiconductor firm from shipping two high-end AI chips to China.
China is a great consumer of products that use US technologies and China is also a critical part of the global supply chain, Huang said.
Experts said Washington has adopted a series of well-calculated approaches to contain China's chip industry, including a law passed earlier this year on chip subsidies. The law has helped motivate the US company Micron to promise a $100 billion investment over the next two decades for a new chip factory in upstate New York.
Zhong Xinlong, a senior consultant at the Beijing-based China Center for Information Industry Development Consultancy, said such restrictions will motivate Chinese companies to double down on resources to achieve breakthroughs.
In 2015, the US government blocked Intel from supplying its high-end Xeon Phi processors to China's supercomputer builders. Under the pressure, Chinese researchers came up with self-developed processors a year later, Zhong said.