On December 3rd, according to the "STAR Market Daily" (Reporter Guo Hui), after the USA Department of Commerce announced a new round of export control entity lists, today (December 3rd), relevant domestic departments, technology industry associations, and leading market enterprises actively responded to external concerns, quickly assessing the impact and considering response strategies.

The Chinese market has become the most important application market for the global integrated circuit industry, and China is also one of the few regions in the world with active semiconductor capacity investment. Some analyses believe that the new round of export controls by the USA splits the global semiconductor market and may also restrict the development of USA companies themselves.

In fact, in the past two years, foreign semiconductor companies such as stmicroelectronics, micron technology, and intel have chosen to increase their investment in the China market and value the growth opportunities of Chinese customers. These genuine voices from overseas market companies are bullish on China's future growth outlook and share development opportunities.

Industry associations: Call for attention to the security risks of USA chips.

The China Semiconductor Industry Association stated that the USA government's arbitrary modification of trade rules has caused substantial damage to the safety and stability of the global semiconductor industry chain. As the USA export control measures continue to tighten, their self-defeating effects are also expanding. The arbitrariness of the USA controls on China has also caused supply chain interruptions and increased operating costs for USA companies, affecting the stable supply of USA chip products, making USA chip products no longer safe and reliable.

"As the most critical line of defense in information security, the safety risks faced by underlying chips are often more deadly than those of software," said a senior practitioner in the domestic chip industry. In addition to the hardware security risks of chips, the reshaping of the global semiconductor supply chain has already elevated supply chain security to a national strategic level.

The China Communications Enterprise Association, China Automobile Industry Association, and China Internet Association issued a statement today (December 3rd) and unanimously called on domestic companies to慎重选择采购美国芯片.

The China Communications Enterprise Association stated that its trust and confidence in purchasing chip products from American companies have been shaken, believing that American chip products are no longer reliable or safe, and calling on the government to conduct a security investigation into the supply chain of key information infrastructure and take strong measures to ensure the safe and stable operation of key information infrastructure.

The China Association of Automobile Manufacturers declared that the auto industry is highly globalized, and China's automotive industry is firmly rooted in global development. It strongly opposes the U.S. government's broadening of the national security concept, the abuse of export control measures, and maliciously blocking and suppressing China. This behavior seriously violates the laws of market economy and the principles of fair competition, disrupting the international economic and trade order. The U.S. government's arbitrary modification of regulatory rules has severely affected the stable supply of American chip products, and the trust and confidence of China's automobile industry in purchasing chips from American companies is being shaken; American automotive chip products are no longer reliable or safe.

The China Internet Association stated that to ensure the safety, stability, and sustainable development of China's internet industry, domestic companies are urged to take proactive measures, cautiously choose to purchase American chips, seek to expand cooperation with chip companies from other countries and regions, and actively use chips made by domestic and foreign-invested enterprises in China. Despite the U.S. ignoring the stability and safety of the global supply chain, China should still insist on expanding autonomous openness. On the basis of ensuring safety, continue to firmly establish and maintain cooperative win-win relationships with all global parties, promoting the prosperity and development of the global economy.

The Ministry of Commerce also announced today (December 3) that, in accordance with the relevant laws and regulations such as the "Export Control Law of the People's Republic of China," it has decided to strengthen export controls on relevant dual-use items to the USA to maintain national security and interests and fulfill international obligations to prevent proliferation. Effective immediately: 1. The export of dual-use items to military users or for military purposes in the USA is prohibited. 2. In principle, no export licenses will be granted for gallium, germanium, antimony, and relevant dual-use items; exports of graphite dual-use items to the USA will be subject to stricter end-user and end-use reviews.

Ministry of Foreign Affairs spokesperson Lin Jian stated at today's (December 3) regular press conference that China has lodged solemn representations regarding the USA's update of semiconductor export control rules and sanctions against Chinese enterprises, maliciously suppressing China's technological progress. "China has always firmly opposed the broadening of the national security concept by the USA, the abuse of export control measures, and the illegal unilateral sanctions and extraterritorial jurisdiction imposed on Chinese enterprises. This behavior seriously undermines the international economic and trade order, disrupts the stability of the global supply chain, and harms the interests of all countries. China urges the USA to respect market economy laws and fair competition principles and will take necessary measures to firmly safeguard its own security and development interests."

Institutions: Export controls may restrict the development of American enterprises.

Today (December 3), many domestic semiconductor companies also assessed the impact of the USA's new round of export control entity list. Most companies indicated that since the supply chain has been basically localized, the overall impact is controllable.

Naura Technology Group announced today (December 3) that it has noted that the U.S. Department of Commerce released the latest "entity list" on December 2, 2024, local time, which includes Naura Technology Group and ten of its subsidiaries. The company is currently operating normally, and being included in the "entity list" will not have a substantial impact on the company's business. The company will continue to pay attention to and follow up on the developments of subsequent events and actively communicate with relevant parties to prepare for responses.

On December 3, Huada JiuTian announced before the market that it has noted information released by the U.S. Department of Commerce on December 2, 2024, stating that the company and its affiliated subsidiaries have been included on the entity list. The company is actively responding to the risks associated with being placed on the "entity list." The overall impact of being placed on the U.S. entity list is manageable. Currently, the company's operations and financial situation are normal, and various businesses are progressing steadily. The company will seize development opportunities to accelerate the localization process of full-process EDA tools.

On December 3, Tuojing Technology stated in its investor relations activity record that despite the company and its affiliated subsidiaries being included on the new round of the U.S. "entity list," this event will not have a substantial impact on its daily operations. It has established a stable supply chain system to ensure the security and integrity of its business operations. Currently, the company’s various businesses are progressing steadily, and its operational and financial status is normal.

On December 3, the analyst team led by Fu Qiang from Ping An Securities released a research report stating that the new round of U.S. export control entity lists will further bifurcate the global semiconductor market and will compel the domestic ICT industry to accelerate its localization process.

On one hand, semiconductors require large investments and are high-risk, and a global supply chain can alleviate the investment pressure on a single country or region, disperse risks, and leverage respective comparative advantages, avoiding duplicative efforts, which allows the industry to develop more healthily. A policy of "small courtyards and high walls" would cause a rupture in the global industrial chain. On the other hand, China has become a significant market for semiconductor products and equipment globally, with U.S. companies like AMAT, LAM Research, and Synopsys participating deeply in the market. At the same time, China is currently one of the few active regions for semiconductor capacity investment globally, and limiting exports to China may also restrict the development of U.S. companies.

Overseas semiconductor giants: repeatedly increasing investment in the Chinese market.

Currently, the Chinese market has become the most important application market for the integrated circuit industry globally. China has become the world's largest automobile producer and consumer, and is also the largest single market for smart phones. Correspondingly, the upstream core industry chain has also experienced accelerated growth.

In the chip design sector, a recent research report released by Bocom Intl predicts that the compound annual growth rate of China's integrated circuit design industry from 2023 to 2032 will reach 9.8%, surpassing the global integrated circuit market’s compound growth rate of 8.5% during the same period, and it is expected that the self-sufficiency rate of China's integrated circuit design industry will increase from 18% in 2022 to 27% in 2028.

In the semiconductor equipment sector, SEMI expects the global semiconductor equipment market to reach 109 billion USD by 2024, with China being a crucial growth engine for the global semiconductor equipment market, displaying explosive growth in market demand in recent years. SEMI data indicate that in 2023, semiconductor equipment sales in mainland China reached 36.66 billion USD, making it the largest semiconductor equipment market in the world for four consecutive years since 2020.

This year, many overseas semiconductor companies have chosen to increase their investment in the china market. The genuine voices from these overseas market companies are bullish about china's future growth landscape and share the development opportunities.

In November of this year, the european chip giant stmicroelectronics held an investor day event in Paris, France, announcing a collaboration with hua hong semi, planning to produce 40nm MCU chips at hua hong's Wuxi factory by the end of 2025 to support its medium and long-term revenue goals.

Previously, in June 2023, stmicroelectronics announced a joint venture with the domestic compound semiconductor leader sanan optoelectronics to establish an 8-inch silicon carbide device manufacturing plant in chongqing, with a total project investment expected to reach approximately 3.2 billion dollars.

In October of this year, stmicroelectronics CEO Jean-Marc Chery publicly stated that stmicroelectronics hopes to become an international company with a 'localized' mindset, fully understanding the strategies, values, and missions of the countries where the company operates. At the same time, china is an important part of stmicroelectronics' strategy, 'hoping to think in a way that aligns with the chinese mindset and embrace change with the same enthusiasm and determination. The company is committed to becoming a leading enterprise in the chinese market and is very bullish on the future of the chinese market.'

In March of this year, global memory chip giant micron technology held a groundbreaking ceremony at its packaging and testing plant in Xi'an. The new plant project is expected to start production in the second half of 2025, creating an additional 500 jobs, with an output value reaching 3.6 billion yuan. Just last June, micron technology announced plans to invest over 4.3 billion yuan in its packaging and testing factory in Xi'an, china over the next few years. In fact, since 2006, micron has invested more than 11 billion yuan in Xi'an, and the Xi'an plant has become an important global center for micron's DRAM chip packaging, testing, and module manufacturing.

Amidst a global trend against globalization, usa semiconductor company intel is currently undergoing a difficult transformation, hampered by its advanced wafer fabrication project. However, intel's senior vice president and chairman for intel china, Wang Rui, previously publicly stated that intel china is very important to intel, and the china region has always been leading intel's global growth. There will be no reduction in investment in intel china in the future and the intel team is further promoting cooperation with customers in the chinese market.