Chinese Government Subsidies in the Semiconductor Industry: Bad for American Companies and Competitiveness

Last month, Stephen Ezell, Vice President for Global Innovation Policy at the Information Technology and Innovation Foundation, testified before the U.S.-China Economic and Security Review Commission. Much of his testimony addressed how Chinese government subsidies in its homegrown semiconductor industry has damaged American companies and the marketplace in general.  The problem, according to Ezell, is that “Chinese subsidies (and other mercantilist practices) are propping up inferior, less innovative Chinese semiconductor enterprises at the expense of U.S. and other foreign competitors.” He continues: “In the semiconductor sector, perhaps China’s most pernicious mercantilist practice has been aggressively industrial subsidization, largely channeled through the country’s $170 billion National Integrated Circuit (IC) Fund.” Writes Ezell, “Such subsidies are an important part of the explanation… Read More

YMTC Threat Continues to Grow; American Companies May Be Breaking U.S. Law

The Financial Times reports that the U.S. government is examining whether YMTC, a Chinese state-owned semiconductor manufacturer with deep ties to the Chinese military, is supplying Chinese telecom giant Huawei with chips for its 20e phone. If true, that relationship poses enormous legal risk for American companies currently doing or hoping to do business with YMTC, including Apple. For more, visit China’s Army to infiltrate iPhones with YMTC Chips. To recap: Huawei is currently subject to U.S. export controls over concerns its technologies will be used to surreptitiously collect user data and feed it back to the Chinese government. If YMTC is in fact found to be supplying Huawei with chips made with help from American tech firms like Lam… Read More

PLA in Your iPhone? CTT Launches New Site on the Implications of Apple’s Negotiations with Chinese “National Champion” YMTC

Late last month a report surfaced that Apple is in talks with China’s “national champion” semiconductor maker, Yangtze Memory Technologies Co. (YMTC), to provide chips for its next iPhone. This week, China Tech Threat (CTT) is launching a new site to track Apple’s negotiations with YMTC, what’s at stake for the U.S. from national security and economic standpoints, and how policymakers and experts are reacting. “Apple is the most valuable brand in the world, and the choices it makes send important signals,” Dr. Roslyn Layton explained. “Apple’s partnership with YMTC would put the Chinese military in the iPhone, one of the most popular devices in the world. This deal would threaten Americans’ privacy and security, undermine semiconductor jobs in democratic… Read More

CTT Quick Cut: BIS Is at an “Inflection Point,” Should “Rebalance Economics and Security”

Last week Congress confirmed Alan Estevez to serve as Undersecretary of Commerce for Industry and Security, finally filling the top post at the “most important agency most Americans have never heard of.” Mr. Estevez’s confirmation comes at a critical juncture, and he inherits a full slate of issues to address. China Tech Threat Co-Founder Dr. Roslyn Layton was joined by Kevin Wolf, former Assistant Secretary of Commerce for Export Administration, and Dr. Derek Scissors, Senior Fellow at the American Enterprise Institute, for the latest CTT Quick Cut, “Competing Views on the Future of BIS,” where Mr. Estevez and the agency’s priorities were the focus of discussion. Setting an Agenda at BIS Mr. Estevez needs to take the lead on setting… Read More

Apple Reportedly Considering Sourcing Chips for Next iPhone from China’s “National Champion”

Apple, the world’s most valuable company, is considering sourcing memory chips for its iPhone 14 from Yangtze Memory Technologies Company (YMTC), according to a recently uncovered Credit Suisse report. The report, which was obtained by industry news outlet Light Reading, states that “YMTC could start supplying memory for new iPhone models in 2022.” Noting that Apple began adapting the design of NAND controllers last year to support YMTC chips, the report predicts that the company’s decision will be made within the next two months. “YMTC’s presence in the best-selling smartphone would look about as welcome as a Gazprom pipeline through Germany does to opponents of Russia,” Light Reading editor Iain Morris adds. U.S. experts and policymakers have cautioned that YMTC,… Read More