China has warned that it may take legal action against individuals or organizations supporting US measures that discourage the use of advanced Chinese semiconductors.

This announcement follows a US advisory issued last week that cautioned companies against using Huawei’s Ascend AI chips due to potential export control violations.

In a statement, China’s commerce ministry criticized these US actions as “discriminatory restrictive measures” targeting Chinese firms. It said that such actions could lead to “corresponding legal liabilities.”

The ministry urged the US to respect international trade rules and uphold the rights of other nations to develop their technologies.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Historical echo of semiconductor trade strategies dating back decades

China’s legal threat follows a familiar pattern in semiconductor trade disputes that has evolved since the 1980s Japan-US conflicts.

During the Reagan administration, the US imposed tariffs on Japanese electronics after declaring semiconductors vital to national security with the President stating, “We cannot allow it to be jeopardized by unfair trading practices” 1.

This approach has continued with China, as evidenced by the 2022 introduction of export controls specifically designed to restrict China’s access to advanced semiconductor technologies and the passage of the CHIPS Act allocating $52 billion to enhance domestic semiconductor manufacturing 2.

The current dispute over Huawei’s Ascend AI chips is part of this ongoing pattern where semiconductor technologies are increasingly viewed through a national security lens rather than purely as commercial products.

The consequences of these restrictions are significant given China’s position as the purchaser of 31.4% of global semiconductors in 2022, creating substantial market impacts for both nations 2.

2️⃣ Trade restrictions trigger reciprocal countermeasures creating escalation cycles

China’s threat of legal action represents a predictable escalation pattern that has characterized recent US-China tech disputes.

When the US implemented semiconductor export controls, China responded with specific retaliatory measures, including banning sales of Micron chips and blocking mergers involving US semiconductor companies 2.

The threatened legal action against those implementing US restrictions on Huawei’s AI chips follows China’s established pattern of responding to US technology controls with its own restrictive measures, including tightened export controls on critical minerals 3.