Expect China to 'fight hard' against chip export controls

The US will roll out new export controls on semiconductors and is now targeting quantum computing and high-bandwidth chips as China makes advances in the industry. The Futurum Group CEO Daniel Newman joins Morning Brief to discuss the news and how it may affect the global chip sector.

"I shared this morning some rumors out that in China, renting an A100 or an H100 [processor] actually costs less than in the US, which is the indicator to me... that China is getting enough supply even though they're not supposed to be. So these controls, they're really complicated, very nuanced, whether or not they work well and how effective they are," Newman explains.

He notes that the semiconductor supply chain is '"really complex." As the US wants to see Japan and the Netherlands move forward with more export controls, he explains that China will face difficulty getting its hands on the most advanced nodes, and ultimately stunt its chip development.

"The world, of course, wants to make sure that it maintains a global leadership position in semis. As we move into three and two and these newest nodes from TSMC (TSM) and from other foundry providers, they want China to be behind for a few years," he tells Yahoo Finance.

He adds, "The global supply chain of semiconductors and all of the policymakers are certainly going to make it very hard. I expect China to fight hard against it, but I don't expect this to slow down."

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This post was written by Melanie Riehl

Video Transcript

The Biden administration rolled out some fresh export controls on quantum computers as China continues to make advances in the global chip industry.

I mean, it's not even just the US at this point, you've got Japan also making some weakly adjustments there.

I mean, my goodness, the Netherlands too don't upset the Dutch on this matter.

But what does this mean when you have so many different countries and and this latest effort from the US to really try and curb or at least protect even more intellectual property.

What does that signal to you?

Yeah, but you know, it's interesting, I shared this morning some rumors out that in China renting an A 100 or an H 100 actually cost less than in the US, which is the indicator to me.

And we always talk about this that China is getting enough supply even though they're not supposed to be.

So these controls are they're really complicated, very nuanced, whether or not they work well and and how effective they are having said that the the semiconductor supply chain is really complex.

And you mentioned the Dutch Japan, there's, you know, so many different parts and by each one of these parts not being able to support China's needs.

It creates more difficulty for China to really get to those most advanced nodes.

The world of course wants to make sure that it maintains a global leadership position in semis as we move into three and two, these these newest uh nodes uh from TS MC and from other, you know, foundry providers, they want China to be behind for a few years.

I always say Brad don't rule them out.

But the global supply chain of semiconductors and all of the policymakers are certainly going to make it very hard.

I expect China to fight hard against it.

Um but I don't expect this to slow down these, these policymakers and some of these export controls.