US Export Controls: A Flawed Strategy Against China and Russia's Chip Ambitions

The US's efforts to curb China's and Russia's access to advanced computer chips have been deemed inadequate by a recent report. Despite implementing export controls in 2024, these measures have not been effective in preventing China from advancing its domestic semiconductor manufacturing system. This article explores the limitations of the US's current strategy, the potential loopholes that China and Russia may exploit, and alternative approaches to complement these export controls.

The US's export controls, announced in December 2024, included restrictions on 24 types of chip manufacturing equipment and 3 software tools, as well as the addition of nearly 150 Chinese companies to the entity list. However, these measures have not been sufficient to impede China's progress in the semiconductor industry. A recent report found that China has managed to stockpile restricted technology and exploit loopholes in the US's controls.

One of the primary weaknesses in the US's strategy is the failure to restrict older versions of high-bandwidth memory (HBM) chips and various chipmaking equipment, which China may still be able to access easily. Additionally, the US may have missed an opportunity to blacklist companies that Huawei regularly uses, such as ChangXin Memory Technologies Inc., leaving loopholes for these companies to exploit. Furthermore, the slow implementation of controls may have given China time to stockpile restricted technology, potentially diminishing the effectiveness of the restrictions.



China and Russia have been actively responding to the US's efforts to curb their access to advanced computer chips. China has been investing heavily in its domestic semiconductor industry, receiving $13.5 billion in government funding in 2020 and planning to invest $150 billion by 2030. Russia, on the other hand, has been developing its own chip technology and has announced plans to invest $1.5 billion in its semiconductor industry by 2024. Both countries have also been exploring alternative supply chains and partnerships to mitigate the impact of US restrictions.

To quantify the effectiveness of the US's export controls, several metrics can be used. First, track the reduction in the number of advanced chips exported to China and Russia. Second, monitor the decline in the production capacity of advanced chips in these countries. Third, assess the impact on the stock prices of companies affected by these controls, such as chip manufacturers and equipment suppliers. Lastly, evaluate the changes in the global semiconductor supply chain, including shifts in production and investment decisions.

The US's efforts to curb China's and Russia's access to advanced computer chips have had significant impacts on the global semiconductor market. The export controls announced in December 2024 disrupted supply chains and increased tensions between the US and China. These measures have led to a surge in demand for alternative suppliers, with companies like Samsung and TSMC benefiting from increased orders. However, the long-term consequences for the industry are uncertain, as China may find ways to circumvent these restrictions, potentially leading to a new wave of technological competition and geopolitical tensions.



To complement the US's export controls and further limit China's and Russia's access to advanced chips, alternative strategies could be employed. These include strengthening alliances with allies to create a united front, investing in the domestic semiconductor industry to maintain a competitive edge, harmonizing export control regulations with international organizations, imposing targeted sanctions on specific entities and individuals, and enhancing cybersecurity to protect intellectual property and prevent the unauthorized transfer of technology.

In conclusion, the US's current strategy to curb China's and Russia's access to advanced computer chips has been deemed inadequate. To effectively limit their access to critical technology, the US must consider alternative strategies and work with allies to create a more cohesive approach. By doing so, the US can better protect its national security interests and maintain its technological advantage in the global semiconductor market.