The Chinese Raise Alarm over Safety of US Chips as China-US Trade Wars Intensify
Chinese chip manufacturing associations have raised alarm over the reliability and safety of US chips. According to Reuters, the associations urged Chinese companies to purchase locally manufactured chips in response to Washington’s move to curb China-made chips.
The associations comprise 6,400 companies drawn from the largest industries in China. Their memberships are drawn from the digital economy, telecommunications, semiconductors, and automobile industries. The statements from the associations appeared to be well coordinated, coming shortly after each other. However, the statements did not outline details why US chips are not safe or reliable.
China-US Chip Trade Conflicts
The warning from the Chinese association comes soon after the US launched the third major crackdown on China’s semiconductor industry. The crackdown has seen the US government restrain exports to 140 Chinese companies.
Over the last two days, economic wars between the two countries have escalated tensions prior to Donald Trump’s return to the White House. The president-elect has already stated that he will impose heavy tariffs on Chinese imports. These pronouncements have revived trade that the incoming president ignited during his first term.
The Chinese associations claim that the chip export restrictions imposed by the US have caused significant damage to the development of the country’s Internet industry. However, companies targeted by the US export controls said their production will not be disrupted by the restrictions.
Impact on US Chip Manufacturers
China’s chip safety concerns could have a huge impact on large US chip manufacturers like AMD, Nvidia, and Intel. These companies have been selling their products in the Chinese market regardless of export controls. The US Semiconductor Industry Association called on the two governments to de-escalate the conflict, saying China’s assertion that US chips are unreliable is not accurate.
“Coordinated calls in China to limit procurement of U.S. chips are unhelpful, and any claims that American chips are ‘no longer safe or reliable’ are simply inaccurate. Export controls should be narrow and targeted to meet specific national security objectives. We encourage both governments to avoid further escalation,” the Association said.
The warnings from the Chinese manufacturers association may be viewed as soft advice to their members. Companies could take it up, but that will be determined by the market.
“China had been moving quite slowly or carefully in terms of retaliating against moves by the United States, but it seems pretty clear that now the gloves are off,” Trivium China Associate Director, Tom Nunlist said.
China’s Mineral Export Ban
On December 3, 2024, China announced a ban on all rare mineral exports used in solar cells, military applications, fiber optic cables, and other processes. The US said it will be taking steps to deter further coercive actions by China following the ban. The US also said it will continue to diversify its supply chains from China. Nunlist sees China’s mineral export ban as more crucial.
China’s Internet Society has also asked local companies to reconsider US chips and instead expand their partnership with manufacturers in other countries or regions. The Society specifically asked its members to use chips manufactured by Chinese-owned companies both locally and internationally.
The Association of Communication Enterprises called on the Chinese government to investigate the security of the country’s information infrastructure. The latest chip safety warnings mirror China’s actions towards US memory chip manufacturer, Micron. Last year, China subjected Micron to a cybersecurity review soon after the US announced export restrictions on its chipmaking technology to the country.
Later, China banned Micron from selling chips to Chinese companies. The ban had a huge impact on Micron’s revenue. In October 2024, China’s Cybersecurity Association called for a review of Intel products claiming that they have been harming the country’s national interests and security.
