The West Leaks Chip Tech to China
The West Leaks Chip Tech to China

By Anders Corr

The U.S.-China chip war is heating up. The world’s two largest superpowers are clashing over semiconductors that determine increasingly more of our lives, from when the smart toaster pops in the morning to what we write to our friends, family, and colleagues using ChatGPT in the afternoon.

The latest silicon wafers, with transistors as tiny as a virus, fuel the most powerful artificial intelligence (AI) systems that will determine success on 21st-century military and economic battlefields. AI could extinct the human race if it escapes human control and determines its own goals or comes under the control of a malicious individual like a hacker.

The future of humanity rides on who controls AI and who controls the most powerful chips that give the indispensable computing punch to AI and other leading economic and military technologies.

Computer chip manufacturers who might lose key technologies to adversary nations—most notably communist China—are therefore coming under increasing attention from authorities in the United States, the Netherlands, Japan, South Korea, and Taiwan, where top chips are designed and manufactured.

The Biden administration is considering new chip controls and outbound investment restrictions on top of October export controls by the U.S. Commerce Department—a move The New York Times called an “act of war.” In the fall of 2022, the department followed up on the Trump administration’s Huawei controls by imposing the strictest-ever export controls on chip technologies in coordination with Taiwan, Japan, and the Netherlands.

China imports more computer chips by value than oil, and an oil embargo on Japan sparked the Pearl Harbor attack in 1941. So the “war” metaphor is not entirely misplaced. Beijing is playing with fire in attempting to assert its own global hegemony, and democracies have been forced to fight fire with fire in response. Beijing’s alliance with Moscow, and the latter’s attacks on Ukraine, are adding to a global sense of alarm. Between November and December, China’s exports of integrated circuits to Russia jumped approximately 350 percent.

Therefore, Washington’s plan for enhanced chip controls on China takes on critical national security significance for both Europe and Asia. Yet America’s largest chip companies, who benefited from approximately $63 billion in combined Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act subsidies and tax breaks, oppose the restrictions. Their biggest customers are in China, the “world’s factory” that produces most electronics products, not to mention serves as a transshipment hub to the world’s most dangerous regimes.

On July 17, executives from Intel, Qualcomm, and Nvidia lobbied Biden administration officials, including Secretary of State Antony Blinken, Commerce Secretary Gina Raimondo, National Security Council director Jake Sullivan, and National Economic Council director Lael Brainard.

Sen. Marco Rubio (R-Fla.) denounced the effort. “The heads of Intel, Nvidia, and Qualcomm are putting profits ahead of national security,” he said in a July 19 statement. “These CEOs are lobbying against export controls designed to keep the Chinese Communist Party away from AI technology.”

Mr. Rubio noted that American capital and chips strengthen the Chinese regime. “We cannot allow China to get its hands on advanced AI chips,” he said. “I urge the Biden Administration and my congressional colleagues to stand firm and not give in to these CEOs’ last-minute lobbying.”

The House Select Committee on the Chinese Communist Party (CCP), co-chaired by Reps. Mike Gallagher (R-Wis.) and Raja Krishnamoorthi (D-Ill.), summoned Qualcomm and other investors in China’s tech companies to examine the feasibility of restricting venture capital investments in sensitive technologies like AI, quantum computing, and chipmaking. The committee stated that the tech companies in China contribute to the regime’s human rights abuse and military modernization, threatening U.S. national security and technological dominance. By extension, the investors bear some responsibility for these negative outcomes.

Loss of technology is ongoing, as 30,000 experts in the largest European tech companies over the last two decades have moved to China in what amounts to a “brain drain” fueled by Beijing’s semiconductor and telecom ambitions.

“US officials have warned for years that China incentivizes intellectual property theft with a vast system of cash grants, tax breaks and other perks designed to induce Chinese nationals living abroad to bring back expertise and trade secrets,” according to Bloomberg.

The United States and our allies have been caught out by the CCP in what is becoming our most dangerous hour, and a struggle for the values of liberty and democracy upon which our nation was founded. Now, we must make up for lost time.

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