Analysts say China may face more restrictions on chips in 2024

This came after the US tightened export controls on advanced semiconductors and chipmaking tools to China in October last year, building on previous rules. Washington is concerned that Beijing may use these advanced chips in artificial intelligence and military applications.

“I wouldn't be surprised if there are more [U.S. restrictions] Only coming because we're still in the middle of this mutual relationship. “There are a lot of hawks in the United States who are really concerned about China's military buildup,” Dan Hutchison, vice president and senior research fellow at TechInsights, said on CNBC's Squawk Box Asia on Tuesday.

Beijing criticized the Dutch government's moveHe urged the Netherlands to “adhere to an objective, fair position and market principles.”

China's Ministry of Commerce said last week that the United States is using export controls as a tool, adding that it is “deeply concerned about the direct interference of the United States” in the issue of high-tech exports by Dutch companies to China.

“It's further evidence that not only the US government, but also other Western countries like the Dutch government, will continue to escalate some of the restrictions that we've seen around both chipmaking equipment and also advanced semiconductors,” Chris Miller, author of Chip War, told Squawk. Box Asia on CNBC in early January.

In October, the United States banned sales of the A800 and H800 chipsets made by Nvidia specifically for the Chinese market.

Nvidia's less powerful A800 and H800 chips have yet to be developed The US government banned the shipments Subordinate A100 and H100 chips – advanced graphics processing units sold to companies – will be shipped to China in August 2022.

This prompted Nvidia to launch less powerful chipsets in China in December to comply with US export restrictions.

“The US government has indicated that it plans to impose new export controls to fill loopholes on a regular basis,” Miller said.

China's imports of integrated circuits will decline in 2023 Amid US restrictions, the amount will fall by 15.4% year-on-year to $349.4 billion in 2023, according to customs data released on Friday (Jan. 12). The data showed that the volume of shipments also decreased by 10.8%.

“with [U.S.] With elections approaching and political tension in the Taiwan Strait continuing, it is difficult to envision a real rollback of the restrictions. “If anything, I see more tightening,” Daniel Newman, principal analyst at Futurum Research, told CNBC last week.

China opposes Taiwan independence and has urged the United States to “stop arming Taiwan,” according to A Readings on January 10.

Western efforts to contain China's technological advances have prompted the economic giant to look to the self-reliance of its domestic companies.

Since 2019, the United States has imposed sanctions on Chinese technology companies such as Huawei and China's largest chip maker SMIC, forcing Beijing to boost its domestic industry.

Revenues of China's top 10 chip equipment makers rose 39% in the first half of 2023 from a year earlier, according to Shanghai-based CINNO Research.

“I think the short term provides an advantage for the West, but China will do everything it can to make sure it is not left out of the chip race,” Futrum's Newman said.

China has traditionally relied on foreign companies for vital components.

After the Dutch government revoked ASML's export license, Beijing no longer has access to some of the world's most advanced chipmaking tools.

China has also been banned from importing ASML's extreme ultraviolet lithography machines, which companies like Taiwan's TSMC need to make the smallest, most advanced chips.