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Matt Haldane

Global Impact is a weekly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world. Sign up now!
China may “never break through” US sanctions on advanced semiconductor production.
This sobering message from one Beijing-based think tank analyst to the Post in a recent interview is a reminder of the huge hurdles that remain on China’s path towards technological self-sufficiency. Yet, recent advances in Chinese chipmaking illustrate the risk involved in Washington’s bet that it can meaningfully slow such progress.
The US sees its lead in semiconductors as a matter of national security. But some say Washington’s efforts are only strengthening China’s resolve and accelerating its efforts to advance its chipmaking. If China succeeds in this area, it could fragment semiconductor supply chains and technological ecosystems.
There is also a question of how effective the sanctions are in the first place.
In a recent report by Canadian research firm TechInsights, Huawei Technologies’ top artificial intelligence (AI) chip, the Ascend 910B, was found to have integrated circuits produced by the Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest and most advanced chip maker.
Huawei denied producing chips with TSMC, and TSMC denied supplying Huawei. But, somehow, TSMC tech found its way into the chipset that is helping Chinese companies grapple with limited access to products from AI-chip-leader Nvidia.
Black markets for sanctioned tech are nothing new, of course, but the report adds to evidence that China’s semiconductor industry is finding ways to circumnavigate US export rules.
In recent months, new chip tech coming out of China has suggested that innovation on this front is “much stronger” than previously understood. An analysis by the Washington think tank Information Technology and Innovation Foundation found that Huawei may be just three years behind global chip leaders.




Huawei’s role as China’s national champion in this space is well known at this point. It designed an entirely domestically produced 7-nanometre chip, manufactured by the Shanghai-based Semiconductor Manufacturing International Corporation (SMIC), for smartphones last year.
Huawei has also emerged as China’s leading AI chip maker, and it is currently testing its latest 910C with server companies. The central government has advised local companies to use domestically made AI chips.
On the manufacturing front, Shanghai Micro Electronics Equipment appears to be making some progress in lithography. The company filed a patent for extreme ultraviolet lithography (EUV) equipment, a field currently dominated by Dutch firm ASML, which cannot ship such machines to China.
The government has also been touting the country’s progress in this area, as well. The Ministry of Industry and Information Technology pointed to two deep ultraviolet lithography machines, a process less advanced than EUV, having “achieved significant technological breakthroughs”. It did not say who made the machines.
An easier area to find progress is in chip design, which has been happening incrementally outside of Huawei. Smartphone maker Xiaomi reportedly designed China’s first 3nm smartphone chip, reaching the final tape-out phase before manufacturing. Xiaomi did not comment on the news, and it was later scrubbed from the Chinese internet despite originally being reported by a state broadcaster.
Meanwhile, Yangtze Memory Technologies Corporation (YMTC), a maker of flash memory chips that, like Huawei, is sanctioned by the US, has made progress in its chip-design architecture. The company’s 512-Gb triple-level cell chip, with 160 active layers, narrows the bit-density gap with global industry leaders.


China has tried to keep its chip industry grounded. It is making gains in areas where it has advantages, such as advanced-node chips using 28nm processes or larger, which are used in everything from cars to appliances. But the country has also been looking for more futuristic breakthroughs that might eventually help it avoid US sanctions altogether.
One of these technologies involves photonic integrated circuits, which use optical signals instead of electrical. Wuhan-based JFS Laboratory recently announced that it was the first company in China to integrate a laser light source with a silicon-based chip.
There has also been an international hunt for alternatives to silicon semiconductors. Progress has been slow in this area, but in January, a Chinese-US research team synthesised a functional semiconductor out of graphene for the first time. One of the lead researchers from Tianjin University said it may still be another 10 to 15 years before the industrial implementation of graphene semiconductors.
Where this ends is anyone’s guess right now. A Chinese cybersecurity group recently called for a review of Intel products on national security grounds. The battle of the semiconductors continues.
If the chip ecosystem splinters and creates different systems of incompatible tech, it is not going to benefit anyone. However, more innovation is never a bad thing, and it does appear that the tech war has spurred long-complacent industry players into action. And the most important innovations rarely stay siloed for long.
60-Second Catch-up
TSMC challenges report US is investigating whether it made chips for Huawei.
TSMC chips found in Huawei’s AI processors open firms to fresh scrutiny.
China claims breakthrough in silicon photonics that could clear technical hurdle.
US study finds China’s tech innovation ‘much stronger’ than previously understood.
Huawei’s AI chips take another step forward as Chinese firms look for Nvidia alternatives.
China advocates use of local AI chips over those from US powerhouse Nvidia.
Chinese official praises Xiaomi’s chip design as smartphone giant keeps mum.
Chinese memory chip maker YMTC achieves design breakthrough despite US sanctions.
US adds 6 more Chinese companies to export blacklist for boosting Iran, PLA.
World’s largest contract chip maker TSMC inaugurates its first plant in Japan.
Apple supplier Foxconn to build ‘AI factories’ using US hardware leader Nvidia’s chips and software.
For China’s next big tech leap, its ‘little giants’ must grow up.
Huawei shows China’s supply chain resilience amid trade sanctions, tech decoupling fears.
Targeting China will just poison ties without helping the US.
Deep Dives

Why US hi-tech chip restrictions could be barrier China ‘never breaks through’

As Washington moves to close loopholes, how will Chinese leaders secure access to the technology destined to power the future?

The story of how Chinese scientists overcame technological containment efforts by the Soviet Union and the United States to develop nuclear weapons in the 1960s has long been a textbook staple in China, but analysts caution that today’s hi-tech hurdles could be harder to surmount.
Until recently, a return to such technological isolation seemed inconceivable to younger Chinese brought up during an era of globalisation.
Read more.

‘Impossible task’: US businesses grapple with potential new China tech curbs

US businesses with a China footprint are preparing for more rough times as further restrictions on tech exports are set to take effect

Regardless of the outcome of the United States presidential election in early November, the business community is bracing for more hardship as Washington appears poised to ramp up trade restrictions on China no matter the victor.
Notes from an annual exchange between US officials and business delegations in September, obtained by the Post earlier this month, suggested further containment will focus on four areas: the military end user rule, cloud computing, information and communications technology and the Biosecure Act.
Read more.

Harris or Trump? Either way, Taiwan to remain a flashpoint after US election

Security in the Taiwan Strait will be at ‘greater risk’ over next the 4 years, regardless of election outcome, expert says

With the race for the White House deadlocked less than a month before the election, Beijing has continued to refrain from signalling a preference for Vice-President Kamala Harris or former president Donald Trump to be the next US leader, or any other election-related questions.
But regardless of who wins the election, diplomatic analysts agree that Taiwan will remain the biggest thorn in bilateral ties and one of the most dangerous flashpoints in a possible conflict between Washington and Beijing.
Read more.

China, US locked in lose-lose tech battle whoever wins White House, experts say

The rivalry to dominate in AI, quantum computing and other technologies of the future may even intensify after November’s election

Washington and Beijing’s hi-tech rivalry is expected to continue and even intensify, regardless of who wins the US presidential election, according to analysts who say the tone for further strained US-China relations has already been set.
Former president Donald Trump’s boast that he took “billions and billions of dollars” from China through tariffs on a wide variety of Chinese imports, including hi-tech products, suggest that higher duties could be on the way if he wins the White House.
Read more.

Chinese chip design software star slashes workforce amid market headwinds

X-Epic had a workforce of about 400 working in offices in Nanjing, Beijing, Shanghai, Chengdu and Shenzhen, as of March 2023, according to PitchBook data.

A leading Chinese chip design software start-up is slashing as much as half of its workforce, casting a shadow over Beijing’s efforts to achieve tech self-sufficiency, according to three people familiar with the matter.
X-Epic, established in 2020 with a mission to develop indigenous electronic design automation (EDA) tools to break the monopoly of US firms, started cutting jobs this week across different departments, including its core research and development unit, according to sources familiar with the situation who declined to be identified as they are not authorised to talk to media.
Read more.

Huawei wields growing influence in China’s server industry with AI chip success

Huawei has taken on an increasingly important role under Beijing’s tech self-sufficiency drive, with soaring domestic demand for servers equipped with its AI chips

Huawei Technologies, which was forced to divest its traditional server subsidiary three years ago under pressure from US sanctions, has regained its influence in that sector on the mainland, thanks to the popularity of its artificial intelligence (AI) chips, according to industry analysts.
Shares of Digital China Group, one of the major players in China’s server market, fell by their daily limit of 10 per cent on the Shenzhen Stock Exchange on Monday and continued their weak performance through Wednesday, following a report that said Huawei may adjust its business model and return to assembling servers instead of just providing key components.
Read more.
Global Impact is a weekly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world.
Sign up now!


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Why US chip controls took a back seat at the Xi-Trump summit

Trade truce extension aside, was AI the real Xi-Trump summit breakthrough?

China technology

US-China tech takes a turn as TSMC chips found in Huawei’s AI processors

An employee produces semiconductor chips at a microelectronics enterprise in Hai’an, Jiangsu province. Photo: VCG via Getty Images

A worker producing semiconductor chips at a workshop in Suqian, in China’s eastern Jiangsu province. Photo: AFP

Illustration: Henry Wong

Photo: AFP

Photo: Shutterstock Images

Photo: AP

China’s economy saw its slowest growth in more than a year. Can it still hit its target?

China Railway workers assemble a pipe jacking machine at the construction site of an underground railway station, in Huzhou, Zhejiang province. Photo: Reuters

A woman wearing a face mask shops in a clothing store in Beijing. Photo: EPA-EFE

Illustration: Brian Wang

Photo: Xinhua

Photo: Weibo

Photo: China News Service via Getty Images

From milk tea to noodles, the history and influence of Chinese food culture

A girl poses with Milk Tea Flavours installation at HKIA Arts & Culture Festival in Hong Kong Airport. Photo: Edmond So

Hong Kong-style milk tea is served with popular Hong Kong fare at the HOKO Cafe, a pop-up cafe in the trendy London neighborhood of Shoreditch. Photo: AP

Photo: Xiaomei Chen

Photo: Hector Amezcua

Photo: Bloomsbury Publishing

Photo: Jennifer Wong

Photo: Kong Tea

Photo: Jonathan Wong

Photo: Alexander Brunacci

Photo: Rice Service

China, Philippines continue to clash in South China Sea, with new flashpoint emerging

A China Coast Guard ship is seen from the Philippine Coast Guard vessel BRP Cabra during a supply mission to Sabina Shoal in disputed waters of the South China Sea. Photo: TNS

Philippine Coast Guard personnel wave flags as the Vietnam Coast Guard CSB-8002 patrol ship makes a port call at the Port of Manila. Photo: EPA-EFE

Illustration: Victor Sanjinez Garcia

Photo: Handout

Photo: Australian Department of Defence/AFP

Photo: TNS

Illustration: Lau Ka-kuen

Photo: Reuters

China remains a talking point as election day looms for Trump and Harris

Signs showing support for both Democratic presidential candidate Vice-President Kamala Harris and Republican presidential candidate former President Donald Trump sit along a rural highwar near Traverse City, Michigan. Photo: Getty Images via AFP

US Vice-President and Democratic presidential candidate Kamala Harris shakes hands with former US President and Republican presidential candidate Donald Trump during a presidential debate at the National Constitution Center in Philadelphia. Photo: TNS

illustration by Lau Ka-kuen

Photo: Bloomberg

China’s ‘time running out’ to meet economic growth target as August figures falter

Employees producing basketballs at a factory in Sihong, in eastern China’s Jiangsu province. Photo: AFP

Employees working on a jelly production line at a food factory in Suqian, in eastern China’s Jiangsu province. Photo: AFP

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In this week’s issue of the Global Impact newsletter, we take an in-depth look at the latest in China’s chip development


In this week’s issue of the Global Impact newsletter, we take an in-depth look at the latest in China’s chip development.


Global Impact

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.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}In this week’s issue of the Global Impact newsletter, we take an in-depth look at the latest in China’s chip development

In this week’s issue of the Global Impact newsletter, we take an in-depth look at the latest in China’s chip development