The renewed US trade war threatens the global chip industry

Companies that work in the semiconductor supply chain around the world are engaged in possible disruptions as a result of the increase in trade war, after China imposed restrictions on rare earthly exports and answered the United States by drawing up additional rates and restrictions on the sale of software to the Asian country. The Chinese restrictions, the most targeted steps to limit the stock of rare earth, are Beijing’s first major attempt to exert ‘cross -border jurisdiction’ over foreign companies to target the semiconductor industry, threatening to stimulate the production of the production of artificial intelligence. This step led to US President Donald Trump on Friday announcing the addition of additional 100% tariffs on China and export restrictions on ‘any and all critical software’. Trump: If you impose 100% additional rates on China, Delays in ASML shipments are rare metal restrictions up to weeks-long delays in shipping asml Holding, the world’s only manufacturer of machines producing the most advanced semiconductors, according to a person familiar with the company. Magnet prices a senior manager at a large US semiconductor business, who requested anonymity for talking about internal operations, said his organization is still evaluating the potential consequences, but the most important risk is currently the rise in prices of magnets based on rare metals, which are essential components in the Chip preservation chain. What are rare metal magnets? Why did you enter the trade war? An official at another US company has indicated that his business is in a hurry to identify products that contain rare metals of Chinese origin, which expresses the concerns that the licensing requirements set by Beijing may paralyze supply chains. Ambiguity regarding the new US restrictions. It is not yet clear which US software can be influenced by the latest export restrictions that Trump proposed. Last July, US administration requirements for export licenses for Chip Design software lifted, which were introduced in May as part of a set of measures taken in response to previous Chinese restrictions on the shipping of important rare earth. The new rules require foreign enterprises to be approved in advance to execute any material that contains even trace quantities Chinese rare earth, and explicitly refers to components used to make certain types of chips and develop artificial intelligence research with military applications. “These are the strictest export controls that China has used so far,” says Gracelyn Bhaskaran, director of critical minerals at the Center for Strategic and International Studies, adding: “It is clear that they have the tools and influence to force not only US businesses, but also the entire global businesses.” Kermtlenecks threatens equipment manufacturers of manufacturing machines such as those sold by ASML and applied materials rely much on rare earth, containing small magnets, lasers and other equipment that use these elements. ASML is preparing for possible turmoil, especially because of a clause that states that foreign enterprises should get Chinese approval to re -execute products containing its rare earth, according to the person who is familiar with the company, who noted that Asml is pushing its allies in the Netherlands and the United States to find alternatives. The company declined to comment. China stretches restrictions on the export of rare earth technologies “China’s new restrictions on exports will especially have an impact on chipmakers who use chemicals based on rare earth during production processes, as well as equipment makers who integrate magnets in their devices.” How long are the restrictions? Some observers questioned the duration and extent of the restrictions, considering that they could be a political maneuver before a visit to Asia that Trump would make this month, which included a meeting with Chinese President Xi Jinping. It is also not yet clear how China can hardly find earth on such a granular level of detail to effectively enforce the new rules. Trading tension increases between Washington and Beijing China’s move is seen as a new increase in trade tensions between the two economic forces. Trump has announced new duties that will raise tax on Chinese imports to 130% from next month, a level near the 145% imposed at the beginning of the year before the two countries temporarily reduced the duties as part of a ceasefire to strengthen trade negotiations. China bends its influence in batteries supply chains with new export restrictions. On Friday, Trump threatened to cancel his scheduled meeting with Chinese President Xi Jinping and to describe the new restrictions on rare earth as ‘hostile’. He said in a post on the ‘Truth Social’ platform: ‘I always felt that they were peeking at us, and as usual I was proven right! China cannot be allowed to hold the world as hostage. ‘ Previous attempts at calm and possible consequences It was not the first time that rare earth was at the heart of the trade dispute between the United States and China. After Trump raised customs duties on Chinese imports at the beginning of the year, Beijing replied by reducing the export of metal to US businesses. In the spring, the two parties agreed to a ceasefire, including Trump reduced rates, while China resumed the flow of mineral. The world’s largest chipmakers, including Intel, Taiwan Semiconductor Manufacturing (TSMC) and Samsung Electronics, rely on ASML equipment to produce semiconductors. Samsung and Intel declined to comment, while TSMC did not respond to a request for comment. Washington describes the move as a statement of economic war. An official from the White House said that the government and appropriate agencies assessed the impact of the new rules imposed without pre -warning in an apparent effort by China to expand control over the provision of global technology. John Moolenaar, chairman of the Select Committee on China in the US House of Representatives, described the move as “a statement of economic war against the United States”, adding that China “fired a bullet in the US economy”. What about Europe and Taiwan? The German Ministry of Economics said that the Chinese restrictions are “a cause of great concern”, and emphasize that it is in close contact with the companies concerned and the European commission to coordinate the reaction. Taiwan, who relies mainly on Europe, the United States and Japan for providing rare earth, explained that “an assessment is still underway to determine how the impact on the chip industry” is added: “We will continue to monitor the indirect consequences as a result of varying raw material prices and adjustments of the supply chain.”