This week started with an unusual endorsement of active export controls by a prominent financial titan. Warning of the prospect of a Chinese-dominated chip market in his annual letter to shareholders, JP Morgan Chase CEO Jamie Dimon stated:
But China, using subsidies and its economic muscle to dominate batteries, rare earths, semiconductors or EVs, could eventually imperil national security by disrupting our access to these products and materials. We cannot cede these important resources and capabilities to another country.
At the time, Ben Noon – writing a must-read story in Foreign Policy –offers a cogent analysis of a problem the U.S. government has so far little considered: how to stop China from controlling the world’s legacy chip market.
Noon acknowledges the strategic importance of the export controls the Biden Administration imposed on Chinese advanced semiconductor makers last year, writing that they were “historic strides” for U.S. semiconductor policy. Now, writes Noon, the Administration should go further:
To that end, Noon sees China positioning itself to dominate the legacy market, especially through SMIC:
Noon closes with a recommendation that China Tech Threat endorses:
The alarm bells are going off among foreign policy and financial experts alike. Now Congress and the Biden Administration must take action to stop a rising tide of a Chinese-dominated legacy semiconductor market before it’s too late.
In a report to be released soon, China Tech Threat will examine the problem more deeply and recommend solutions for policymakers to adopt.