The United States limits competition with China for the chip market

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The United States controls through its major semiconductor manufacturing companies – Intel, Nvidia, Qualcomm, AMD and Micron – the market for the most advanced “chips” in the world, focused on the production of computer equipment 3 nanometers which constitute the spearhead of the digitalisation process of the global economy.

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For their part, Chinese companies led by Huawei and SMIC They plan to produce semiconductors of the type this year 5 nanometerswho are those immediately behind the North American avant-garde.

This means not only that the technological gap between the superpowers tends to close rapidly, but also that US manufacturers act with the absolute certainty that Their Chinese competitors may catch up to them in the next 5 years.

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The most powerful of Huawei’s processors is the so-called “AI Ascend920”, which can also be used in third generation nanometer production, so far in the hands of North American companies, and especially Nvidia, the leader of “chips” completely powered by artificial intelligence .

The technological gap between US and Chinese chipmakers manifests itself in the different cost structure, with Chinese manufacturers charging a 40% to 50% premium over North American ones.

In short, the technology transfer restriction measures that Joe Biden’s government has implemented to prevent or frustrate global competition from the People’s Republic, The main consequence, unintended but absolutely objective, was the acceleration of the production of advanced “chips” in China.

The extreme of this paradox is that the largest American companies now anticipate it the baton of knowledge and innovation in the field of “chips” would pass to the People’s Republic in a period not exceeding 5 years.

It is the direct result of the open and necessarily cooperative nature of high technology in 21st century global capitalism; and what the Biden administration has caused There has been a breakdown in this cooperative and open condition.

Everything in capitalism is “objective” and far surpasses the “intentional”; and the “unintended” consequences become the law of history, regardless of the intentions of the protagonists.

This is the irony of the historical process, which necessarily turns American companies into the preferred partners of companies from the People’s Republic.

Each year, China imports more than $400 billion of semiconductors or “chips” and related manufacturing equipment from the world system – it is by far the largest market for “chips” or semiconductors in the world.

This is due, among other things, to the following: The People’s Republic is the most digitalized production system in the world, with more than 1.1 billion Internet users, 80% of whom use fifth-generation mobile Internet equipment.

The big incentive for the Chinese economy is not increased investment, nor growth in the workforce, but incessant and unrestricted competition that exists among its producers in the domestic market.

This is why it can be said that US policy has been aimed at slowing down, and at most frustrating, the scientific and technological development of the People’s Republic. the big incentive which it had in the dispute with the United States in this crucial sector.

It has long been known that the real danger lies in the realization of the deepest dreams, transformed – as in this case – only into threatening nightmares.

The 3 main nanotechnology companies in the United States, in turn producers of advanced “chips”, expressed their total opposition to President Joe Biden’s policy before Congress in Washington, arguing that preventing the sale or transfer of technology to the People’s Republic , the most affected were the American companies themselves, because they were prevented from participating in the largest “chip” market in the world.

This also prevented the installation of new “chip” plants in the United States, contradicting the central objective of the law promoted by the democratic government – “Chips and Science Act” – sanctioned in August 2022, and which provides subsidies for 200,000 million dollars approved by the Washington Congress.

This in other words implies that there is a self-imposed structural lag in the US in the global race to lead the “chips” + AI pair.

The American economy is going through a period of splendor with a consumption boom, excessive employment and the full deployment of artificial intelligence; yet its fundamental weakness it is his utter lack of long-term strategic vision entirely attributable to President Joe Biden. We must always distinguish between what is essential and what is accessory.

This “black hole” of American politics – the physical phenomenon that absorbs energy and does not create it – is the main obstacle the United States has in competing with China in 21st century world politics.

Source: Clarin

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