Trends
US leadership ready for collateral damage in China tech war
OUR TAKEThese planned restrictions could hurt ASML and major U.S. tech giants, while China may use the opportunity to enhance its R&D capabilities and reduce reliance on Western technology, making the effectiveness of the restrictions uncertain.— Yasmine Luo, BTW reporter What happened? Regardless o…
Headline
OUR TAKEThese planned restrictions could hurt ASML and major U.S. tech giants, while China may use the opportunity to enhance its R&D capabilities and reduce reliance on Western technology, making the effectiveness of the restrictions uncertain.— Yasmine Luo, BTW reporter What…
Context
OUR TAKE These planned restrictions could hurt ASML and major U.S. tech giants, while China may use the opportunity to enhance its R&D capabilities and reduce reliance on Western technology, making the effectiveness of the restrictions uncertain. — Yasmine Luo, BTW reporter Regardless of the outcome of the US election in November, American leadership is prepared to take risks to counter China’s technological dominance.
Evidence
Pending intelligence enrichment.
Analysis
According to Bloomberg , the Biden administration is preparing to implement the most severe trade restrictions, particularly targeting the Dutch company ASML and the Japanese company Tokyo Electron. ASML is one of the few suppliers worldwide capable of making lithography machines needed to mass-produce chips vital to sectors like AI. Tokyo Electron ranks 12th among semiconductor-related companies globally. Both provide equipment for China’s chip industry. Although ASML does not sell high-end lithography machines to China, a significant portion of its other products are sold to Chinese companies. Nearly half of its second-quarter revenue, about € 2.3 billion ($2.5 billion), came from China, meaning these measures could severely impact ASML. Meanwhile, prominent presidential candidate Trump recently declared that Taiwan should pay for its own defences against the threat of an invading China, stating, “It doesn’t give us anything.” Consequently, the stock price of Taiwan’s domestic chip manufacturer, TSMC , plummeted. Also read: Intel Forges Ahead with New Chip Innovation Center in Shenzhen Amid Escalating US-China Tech Battle
Key Points
- American leadership is prepared to face significant collateral damage in efforts to limit China’s technological ambitions.
- These planned restrictions could hurt ASML and U.S. tech giants, while China might boost its R&D capabilities in response.
Actions
Pending intelligence enrichment.
