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Opinion
US-China trade war goes nuclear with Trump’s chip software ban
Sweeping ban, albeit hard to enforce, threatens to kneecap China’s semiconductor ambitions and endanger its national security
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Stanley Chao is the author of “Selling to China” (2018) and managing director for All In Consulting, assisting companies in their China business strategies.
It is hardly a stretch to say that the Trump administration went nuclear last week in banning the sale of American semiconductor design software to China. The unprecedented move signals a tectonic shift in policy. The goal now is not simply to slow down China’s semiconductor ambitions; it is to halt them.
As with previous, less extreme restrictions, these ones are likely to backfire. They will further isolate the United States from the world’s largest semiconductor consumer market, strengthen Beijing’s resolve for hi-tech self-sufficiency and force President Xi Jinping to respond in kind.
Yet, even if events follow this now-familiar pattern, the nuclear analogy still holds. The stakes are so high because the latest US bans cut off China’s access to the most advanced electronic design automation (EDA) software.
While EDA is a small part of the broader chip ecosystem, it is arguably the most important part. It is essential for the design, simulation and verification of the most advanced chips, including those used in military defence and artificial intelligence.
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