Core Insights - The control over key materials and processes determines the future direction of industries, as illustrated by the contrasting scenarios in North America and China [1] Global Landscape - In 2019, China held 92% of global rare earth refining and separation capacity, emphasizing the increasing power of countries with processing capabilities [3] - In April 2025, MP Materials announced the cessation of rare earth exports to China, highlighting the importance of processing over raw materials [3][5] Resource and Process Discrepancy - In 2018, China exported 53,000 tons of rare earths, with 80% going to the U.S., which primarily needed high-tech heavy rare earths [5] - The U.S. faced challenges in scaling up rare earth processing despite acquiring technology from a Canadian company, indicating that raw materials do not equate to value [5][10] Technological Advancements - In August 2025, the first successful extraction of high-purity rare earths from 840 kg of ore in Wyoming marked a significant technological milestone for the U.S. [8] - China's decades-long accumulation of expertise in chemical separation and pollution control gives it a competitive edge in the rare earth industry [8][10] Value Chain Comparison - The value of one ton of rare earth ore is approximately 30,000 yuan, while high-performance permanent magnets can sell for 800,000 yuan, illustrating the steep value gradient that China has successfully navigated [10] - The U.S. is still at the beginning of this value chain, struggling to establish a clear path forward [10] Semiconductor Industry Developments - In October 2024, a breakthrough in photolithography with the T150A photoresist series achieved a resolution of 120 nm, marking a significant advancement for China [12] - The development of EUV light sources by Harbin Institute of Technology and DUV light sources by the Chinese Academy of Sciences indicates progress in critical semiconductor technologies [12] Alternative Processing Techniques - In August 2025, Pulin Technology introduced the PL-SR series nano-imprinting equipment, which significantly reduces costs and energy consumption compared to traditional lithography [14] - This advancement positions nano-imprinting as a viable alternative to traditional optical paths, enhancing China's capabilities in semiconductor manufacturing [14] Systemic Approaches - China's strategy involves simultaneous advancements across materials, equipment, software, processes, and talent, fostering a robust industrial ecosystem [16] - In contrast, the U.S. approach to rare earths appears fragmented and project-based, lacking a cohesive industrial chain [18] Future Projections - The U.S. is estimated to require around five years for systemic development in its rare earth industry, while China could achieve a complete self-sufficiency in semiconductor technology within 1 to 3 years [20] - The importance of rare earths lies in their downstream applications, while semiconductors are critical for product manufacturing and upgrades [20] Cost and Environmental Considerations - China's ability to produce high-quality rare earths at lower costs while maintaining environmental standards is attributed to decades of investment in technology and management [22] - The U.S. faces significant challenges in establishing a complete chemical and materials processing system, which complicates its efforts to scale up production [24] Comparative Analysis - The recent advancements in both rare earths and semiconductors highlight the differing trajectories of the U.S. and China, with China making significant strides in critical technologies [26] - The long-term implications of these developments will shape the competitive landscape, with China's systematic approach providing a potential advantage over the U.S.'s more fragmented efforts [26] Historical Context - Key milestones from 2018 to 2025 illustrate the evolving dynamics of the rare earth and semiconductor industries, with China making decisive advancements in critical areas [27]

Core Viewpoint - The U.S. Department of Commerce plans to revoke the blanket exemption for major semiconductor manufacturers like TSMC, Samsung, and SK Hynix, which allows them to use U.S. technology in their factories in mainland China without individual license applications, increasing operational burdens for these companies [1][2]. Group 1: Impact on Semiconductor Manufacturers - The tightening of chip equipment licensing by the U.S. primarily targets China's high-tech industry but adversely affects the operations of global semiconductor manufacturers in China [2]. - China is the largest semiconductor equipment market, accounting for 38% of the global market share in 2024, with U.S. companies like Applied Materials and Lam Research relying on China for 30% to 40% of their revenue [2]. - Samsung's NAND flash factory in Xi'an contributes 30% to 40% of its total NAND production, while SK Hynix's investment in Chinese semiconductor equipment is projected to increase tenfold in 2024, with its Wuxi DRAM factory generating approximately $9 billion in sales, a 64.3% increase [2]. Group 2: Comparison with Rare Earths - The U.S. attempts to equate chip manufacturing equipment with China's rare earth materials management, which is fundamentally flawed as chip equipment is primarily for civilian high-tech industries, unlike rare earths that have military applications [1][2]. - The U.S. strategy to link chip equipment licensing with China's rare earth controls is seen as a mischaracterization of the nature of these resources [1]. Group 3: Global Semiconductor Supply Chain Dynamics - The U.S. does not have absolute control over the semiconductor manufacturing industry, as American chip equipment companies hold only about one-third of the global market share, requiring cooperation from countries like the Netherlands and Japan to enforce restrictions [3]. - The restrictions are catalyzing a "de-Americanization" of the global supply chain, with companies like ASML and Tokyo Electron benefiting from the market gap left by U.S. companies [3]. - Chinese domestic equipment manufacturers are making significant progress, with market share for domestic equipment rising from 16% in 2020 to 28% in 2024, driven by innovations such as the 5nm etching machine validated by TSMC [3]. Group 4: Long-term Implications - The U.S. efforts to completely isolate China from the semiconductor industry are seen as unrealistic, as reversing China's existing capabilities is a significant challenge [4]. - Despite pressures, global semiconductor companies continue to engage with the Chinese market, with firms like NVIDIA launching China-specific GPU versions and maintaining their business scale in China through local R&D [4][5]. - The rapid technological advancements of Chinese equipment manufacturers, achieving over 30% annual iteration rates, are undermining U.S. attempts to disrupt the semiconductor supply chain [5].

Core Viewpoint - The article discusses the ongoing tensions between the U.S. and China regarding the semiconductor industry, highlighting the U.S. accusations against Chinese chip manufacturers and the implications of export controls on both countries' tech sectors [1][3][5]. Group 1: U.S. Accusations and Export Controls - U.S. Commerce Secretary Raimondo criticized Chinese chip companies, claiming they are not producing advanced chips for AI training and smartphones as they assert [1]. - The U.S. Department of Commerce reports that China's annual production of AI training chips is approximately 200,000 units, significantly below the market demand of around 1.5 million units [5]. - Raimondo called for stricter export controls on chips to China, citing the need to prevent technology theft, amidst a backdrop of increasing restrictions since 2019 [3][5]. Group 2: Impact on Semiconductor Industry - The U.S. semiconductor industry has seen a decline in domestic manufacturing share from 37% in 1990 to 11% currently, while China's share has increased from 7% to 24% during the same period [7]. - Major players in the 10nm and below logic chip market, TSMC and Samsung, dominate with 69% and 31% market shares respectively, creating a monopolistic environment [7]. - U.S. sanctions have not only affected Chinese firms but have also disrupted the global semiconductor supply chain, impacting U.S. companies with supply chain issues and market share losses [11]. Group 3: China's Semiconductor Advancements - Despite U.S. restrictions on advanced equipment exports, Chinese companies like Northern Huachuang and Zhongwei Semiconductor have made significant progress in back-end equipment technologies [14]. - Zhongwei Semiconductor's 5nm etching machine has been successfully integrated into TSMC's production line, indicating advancements in China's chip manufacturing capabilities [16]. - China's 12-inch wafer production capacity is expanding at a rate of 30% annually, particularly in the mature process nodes of 28nm and above, positioning China to capture a significant share of the international market [16]. Group 4: Competitive Position and International Relations - Chinese AI chips, such as Huawei's Ascend series, demonstrate competitive performance, achieving 60% of NVIDIA's H100 inference performance while reducing training costs by 40% [18]. - China has implemented export controls on rare earth materials, crucial for semiconductor manufacturing, impacting U.S. companies reliant on these materials, particularly in the automotive sector [22]. - China has signed a $280 billion chip order with ASEAN and African nations, diversifying its market dependencies and strengthening its position in the global semiconductor landscape [24]. Group 5: U.S. Allies and Internal Dissent - U.S. allies are reconsidering their positions, with the Netherlands refusing to fully comply with U.S. directives on DUV lithography machine exports, citing domestic business impacts [25]. - Major companies like Samsung and SK Hynix have lobbied against restrictions on China, warning that such measures could cripple the global automotive industry [27]. - Internal dissent in the U.S. is growing, with former officials questioning the effectiveness of sanctions and the potential for significant job losses in the semiconductor sector [27].