The high-level diplomatic push from the US suggests scepticism about China and its expanding grip on the global tech landscape resulting in the ongoing tech conflict in 2020.
Technology war between US and China began in 2018, and took an unprecedented leap in 2019. The central focus of the contention was Huawei and the 5G campaign. But then as 2019 went on, it also spread to other sectors of scientific collaboration.
The Trump administration mounted an extensive campaign to block the sale of Dutch chip manufacturing technology to China. Secretary of State Mike Pompeo lobbied the Netherlands government and White House officials also offered to share a classified intelligence report with the country’s Prime Minister, reports suggested.
This high-level push from the US suggests scepticism about China’s expanding grip on technology which would have further increased if it was equipped with the expertise of the makers of the world’s fastest microprocessors.
China chip equipment sale
In 2018, the Dutch Government gave semiconductor equipment company ASML the license to sell its most advanced machinery to a Chinese customer. However, after this, the US officials have gone forward every inch possible to block the sale outright by holding at least four rounds of talks with the Dutch officials.
The pressure worked as shortly after the White House visit, the Dutch government decided not to renew ASML’s export license. Consequently, the shipment of $150 million machines was halted. So, the security issue with the machine is that it uses extreme ultraviolet light beams to layout extraordinarily narrow circuits on slabs of silicon known as wafers.
This process helps in creating faster and also more powerful microprocessors, memory chips and other advanced components. ASML’s market value being more than 110 billion euros has dominated the lithography market over the last two decades and is the pride of the Dutch industry. Moreover, with or without the EUV license, ASML expects its Chinese sale to increase in 2020.
Huawei and 5G issue
Since the US continued pressing against Huawei, in May, the company along with sixty-eight others were placed in the list of companies which cannot do business in the US without government approval. Because of this, major companies like Google and Micron, have also suspended doing business with Huawei.
Despite all the bad news for Huawei, the company’s CEO is still positive about its survival even though the ban has forced the company to design its products without US partnerships and market in focus. Furthermore, the European Union headed by German Chancellor Angela Markel has yet not closed the door for Huawei. Members of her party introduced a bill designating suppliers at risk of state influence without constitutional control as “untrustworthy”.
Whereas Telenor has announced using Ericsson for its 5G networks and will gradually remove Huawei. Telenor’s step is important as when it comes to Europe the company’s connections are extensive, with almost every EU state having one network operator deploying Huawei equipment. The company is engaged in research collaboration with almost over 150 universities.
In fact, this curtailment of Beijing’s rise as a technology power has gone beyond Huawei. There has been constant concern by US officials about the deployment of facial and voice recognition technologies within Xinjiang. TikTok is popular among American teenagers (more than 750 million times downloads globally last year). It has also been a concerning topic as officials describe it as a threat to national security and free expression.
This tech conflict between US and China might continue and even escalate in 2020, which may also lead to a slower pace of innovations. China will continue to try and be independent when it comes to technology. On the other hand, the US will keep on moving forward with its efforts to contain China from expanding its number of technologies.