U.S. media let it be known that there is a relaxation of restrictions on Chinese chips, TSMC Samsung may be "exempted"

"The Biden administration intends to extend an exemption that would allow South Korean and Taiwanese Chinese semiconductor makers to maintain operations in mainland China." The Wall Street Journal reported on the 13th that Alan Estevez, undersecretary of commerce for industry and security, told an industry conference last week that the Biden administration intends to extend an exemption to an export control policy designed to restrict the sale of advanced process chips and chip manufacturing equipment to China by U.S. and foreign companies using U.S. technology. Some analysts believe that this move will weaken the effect of the US export control policy on chips to China. Last October, the U.S. government escalated its crackdown on China's chip industry, banning the sale of certain chips manufactured using U.S. equipment to China, making mainland China an important chip market for South Korea and others to be hit.
The news, reported in the Wall Street Journal on the 13th, greatly boosted the performance of Samsung Electronics, SK Hynix and TSMC, the three chip companies in the capital market that day. 13 experts interviewed by the Global Times believe that although the U.S. side has not yet announced the specific details, but the "extension of the exemption" is expected. Because the United States to curb China's chip development measures not only limited effect, but also backfired.
South Korean chip companies "relieved"
After the US government introduced a chip ban last year, South Korea, Taiwan and other regions of China can no longer sell advanced process chips and chip manufacturing equipment to mainland China under US regulations. South Korea's Samsung and SK Hynix is the global leader in the production of memory chips, TSMC is the number one manufacturer of non-memory chips, they all have factories in mainland China. The US ban means that the technological upgrading of these companies' production bases in China has been hampered and their international competitiveness has been significantly weakened. Following strong opposition from Samsung and SK Hynix, the US has granted the South Korean companies a one-year exemption from export controls until October this year. TSMC was also included in the list of exemptions.
According to a report published in the Wall Street Journal on the 13th, several people who attended the aforementioned industry meeting revealed that Alan Estevez said that these exemptions would continue for the foreseeable future. This will allow the aforementioned countries and regions to maintain their existing chip operations in mainland China without retaliation from the US, the report said. The US Department of Commerce had not commented on the claim by the 13th deadline of this newspaper.
"Samsung Electronics, SK Hynix relieved" "South Korea and the US are seeking a long-term solution" ...... The news that the US will allow South Korean semiconductor makers to maintain their operations in China has sparked Korean media widely concerned. The Yonhap News Agency reported on the 13th that South Korean semiconductor industry players welcomed this. A South Korean semiconductor industry source said, although the United States has not yet announced specific details of the program, but feel that the overall is moving in a good direction, worthy of recognition. Another Korean industry insider also said that the memory production lines currently in operation in China would need to be upgraded if they were to continue to operate, and that the introduction of measures by the US that would allow such upgrades to take place would go a long way towards removing uncertainty about the future.
According to the South Korean newspaper Chosun Ilbo, the South Korean and US authorities have been in close consultation over the past few months over the "extension of export control exemptions" and the US Department of Commerce will next study the introduction of a long-term policy applicable to Korean semiconductor companies' exports of technology and equipment to China, replacing the existing "annual extensions". The US Department of Commerce will then study the introduction of a long-term policy for the export of Korean technology and equipment to China, replacing the existing "annual extension of exemptions". A source from the South Korean Ministry of Industry further revealed that the South Korean and US authorities are continuing to communicate and discuss a long-term solution in order to remove the uncertainty of Korean companies' investments in China. If such a long-term solution is formalised, it is expected that new measures will be introduced that are different from the existing export control policy.
Once the news of the "possible extension of the US exemption" was released, Samsung Electronics, SK Hynix and TSMC all reported big gains in Seoul, South Korea and on the Chinese Taipei stock market. By the close of business on the 13th, Samsung Electronics rose 1.41% and SK Hynix rose 4.09%. Driven by the chip sector, the South Korean stock market ended the 13th in the red. On the Chinese Taipei market, TSMC rose 3.31% by the end of the day, with its share price pushing NT$600.
US disguises weaker hardline stance
The Wall Street Journal said foreign governments and companies are closely monitoring the status of these exemption periods to see how the US export restrictions will affect Chinese investment after this autumn.
Previous reports indicate that domestic and foreign chipmakers in the US are very unhappy with and resisting the US government's restrictions on doing business with China. Some governments in Asia and Europe have also pushed back. The strongest criticism has come from South Korea. China is South Korea's largest export market, far ahead of its other trading partners. Analysis suggests that on a political level, the South Korean government may want to keep pace with the US, but in terms of economic interests, it has no desire to abandon the Chinese market.
Taiwan's "Central News Agency" quoted analysts as commenting that the US intends to extend the exemption period, with a strong implication of pulling in allies. The U.S. needs to unite with its allies against China, so it needs to take care of their business interests; if the U.S. extends the exemption period of its chip export control policy, South Korean chip makers can benefit from it. The United States also hopes that South Korea and other countries and regions in other policies to cooperate with the United States.
Xiang Ligang, chairman of the Zhongguancun Information Consumption Alliance, said in an interview with the Global Times on the 13th that an important reason for the U.S. to extend the exemption period is pressure from allies. He said that Samsung Electronics and SK Hynix both saw a rare plunge in performance in the first quarter in their history, and if they then comply with the US policy of suppressing China, future performance will be exacerbated. While the United States is restricting its allies, it is grandly "giving itself a break" as Intel and Qualcomm, among others, continue to export chips to China. This self-serving approach is bound to be met with stronger opposition and resistance.
Xiang Ligang told reporters that the United States pulled together allies to try to form a blockade of China's semiconductor alliance, the effect so far is not obvious, the United States and its allies suffered huge losses as a result. In this case, the United States is riding a tiger, and can not withdraw the so-called "sanctions", can only be extended in the way of exemptions, disguised as a weakening of its hard-line position.
At the same time, China's chip industry is developing at full speed. Nvidia founder and CEO Jen-Hsun Huang said in May that a string of US bans had allowed Chinese chip companies to start producing their own AI chips to compete with products such as gaming, graphics and artificial intelligence processors that Nvidia now boasts worldwide. As a result of the US controls, Nvidia's "hands are tied" and it is difficult to sell several advanced AI chips in one of the company's largest markets.
Huang stressed that China "will make its own if it can't buy what it wants, so the US is bound to be cautious about it".
However, Taiwanese media warned that the US' intention to extend the exemption period for its chip export control policy does not mean that the US is relaxing its restrictions on China's semiconductors.
It is more difficult than expected to "decouple" technology from China
According to US media reports, some US chip industry executives said that the US Department of Commerce's plan to extend the exemption period, rather than gradually reducing or even ending it to strengthen export controls on Chinese chips, implies that the US government recognises that it is more difficult than expected to "decouple" technology from China in a highly integrated global industry. The report mentions that a number of senior US government officials have been involved in the process.
The report mentions that a number of senior US government officials have recently said in quick succession that the US is not seeking to "decouple" from China. President Joe Biden said in April of the Chip and Science Act that it was "not designed to hurt China". US Trade Representative David Deitch said there is a consensus within the current US administration that "decoupling" from China is not a goal and cannot be achieved. US Treasury Secretary Yellen has repeatedly said that a complete separation from the Chinese economy would be disastrous for both countries.
According to some international media, China's economy has been stable and improving for a long time, and its resilience has become more evident amidst growing global uncertainty. The rapid development of high-tech industries has highlighted the effectiveness of China's high-quality economic development, and China has become a hotbed of investment that the world continues to look forward to. These have enabled more countries and enterprises to see that cooperation with China in the economic and trade field is the only way to share the dividends of China's economic development and jointly maintain the security, stability and smooth flow of the global industrial chain supply chain.
Recent data released by China's Ministry of Commerce shows that in the first four months of this year, China's actual use of foreign investment reached RMB 499.46 billion, up 2.2% year-on-year. Foreign investment flowing to high-tech industries increased even more sharply by 12.8% year-on-year, with high-tech manufacturing up 37.1% and high-tech services up 6%. The industry believes that the growth rate of foreign investment absorption in high-tech industries is significantly higher than the overall growth rate of foreign investment absorption, which means that there is plenty of room for market development in China's high-tech industries and the continuous optimisation of the investment environment.