Delegates at a Chinese semiconductor conference in Shanghai have called for "global cooperation", sending a conciliatory message at a time when Washington and Beijing are intensifying a chip war.

At the Global Semiconductor Market Summit on Thursday, one of China's first major chip industry gatherings since the Biden administration imposed new export restrictions, speakers largely avoided commenting on the issue, preferring to highlight the value of "global cooperation".

Yang Songqiang, deputy secretary general of the World Integrated Circuit Association (WICA), a newly formed group that hosted the summit, said under current circumstances it was "more important than ever" to continue global cooperation in the semiconductor industry.

Ouyang Zhongcan, an academic at the Chinese Academy of Sciences, a top state research agency, said that "trade frictions" have caused serious disruptions to the chip industry. "These changes in the business environment not only raise operational costs for companies but also hinder communication and collaboration," Ouyang said.

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The American and Chinese flags are displayed on a printed circuit board with semiconductor chips, in this illustration picture taken February 17, 2023. 

Another academic, Wu Hanming from the Chinese Academy of Engineering, said it was still important to build up "an ecosystem that is inclusive, open, and mutually beneficial" for the global chip industry.

Wang Xiangdong, chairman of Hefei Kaiyue Semiconductor, which is developing domestic alternatives for lithography systems, said a key bottleneck for China was the lack of access to advanced lithography machines, in particular extreme ultraviolet lithography (EUV) from Dutch supplier ASML, and Argon Fluoride (ArF) systems, due to US export controls.

Wang said the restrictions pose significant challenges to the development and mass production of chips at nodes below 7-nanometre. Hefei Kaiyue is working on high-capacity coaters and developers designed to meet ASML's next-generation lithography machine requirements.

The comments come after the US Commerce Department, which oversees export controls, added 140 Chinese chip-related organisations to a trade blacklist and placed additional restrictions on China's access to semiconductor manufacturing tools. The moves marked a major escalation by Washington in its efforts to curb China's ability to use American semiconductor technology for military purposes.

In response, China's state-backed industrial bodies, including the China Semiconductor Industry Association, have called on their respective members to shun chips from US suppliers, saying they are "no longer safe, no longer reliable".

Employees at a semiconductor company in the Suzhou Industrial Park in Suzhou, east China's Jiangsu Province, Nov. 12, 2024. 

While few delegates were willing to speak publicly about the geopolitical tensions, it was clear that the "chip war" cast a shadow over the event. A speaker from Kingstone Semiconductor, one of the 140 companies added to the US entity list this week, did not show up, despite being on the schedule for the Thursday morning session of the conference.

WICA issued a report that forecast 17 per cent year on year growth in the global integrated circuit (IC) market this year, with revenues reaching US$620.2 billion.

In the same period, China's IC market is forecast to grow 20.1 per cent year on year to US$186.5 billion, representing 30.1 per cent of global market share.

Mainland China is expected to maintain its position as the world's largest IC market due to its huge electronics manufacturing base, according to WICA.

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China's largest chip industry associations say it's unsafe to buy US chips — warnings come in the wake of new US sanctions

After the U.S. government imposed fresh sanctions against the Chinese semiconductor sector, various China's industry organizations including China Internet Association, China Semiconductor Industry Association, and China Automobile Industry Association have issued statements claiming that buying American chips is not safe, reports. The organizations urge Chinese companies to use chips made in China, or supplied by non-American companies.

"U.S. chip products are no longer safe and reliable, and China's industry will have to purchase American chips cautiously," a statement by China Semiconductor Industry Association reads.

In general, the organizations condemn the American sanctions against China's semiconductor sector. They also say that the U.S. actions harm the stability and development of China's Internet sector and erode trust in U.S. chip reliability. They state that the restrictions disrupt the global semiconductor supply chain, increase costs, and weaken industry cooperation. Finally, the China Automobile Industry Association claims that these enhanced semiconductor export controls affect the stability of the automotive supply chain, harming global industry stability. In general, the CAIA expects sanctions to have ripple effects on American companies as well.

The Chinese associations represent key sectors such as automotive, digital economy, telecommunications, and semiconductors, together covering 6,400 member companies. China's influential industry bodies advise Chinese companies to limit their reliance on U.S. chips, expand cooperation with international partners, and prioritize domestic products. They also call for global partnerships, and shared technological progress.

While the organizations are influential, it remains to be seen how quickly China's industry will be able to respond (if at all) to the call to abandon American solutions and adopt those developed in China. Automotive, telecommunications, and semiconductor industries tend to be very conservative in terms of the components they use, so whether they can swap U.S.-designed products for domestic ones may not happen any time soon. Still, they will have to turn to domestic products if the chips they need are restricted.

Earlier this week the U.S. implemented its third set of restrictions in three years, targeting Chinese semiconductor companies, including producers of chip manufacturing equipment. The move is a part of efforts to limit China's access to advanced semiconductor technologies, which the U.S. considers a matter of national security. This economic clash comes ahead of President-elect Donald Trump's return to office in January as he plans to reintroduce tariffs on Chinese goods.

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