British chip firm Arm has been taken off the roster for China’s semiconductor supply chain after the UK and US adopting stringent export controls on advanced chips to the country.
It has reportedly left Chinese consumer technology giant Alibaba unable to get its hands on some of the most advanced chips in the sector, according to the Financial Times today.
This is the first known time that Arm has decided it could not export its designs to China, the report said, citing people familiar with the matter.
“As a global company, Arm is committed to adhering to all applicable export laws and regulations in the jurisdictions in which it operates,” an Arm spokesperson said.
“For Alibaba and other China partners, we have a process in place to deliver optimised solutions that address their performance requirements and are fully-compliant with the latest export controls.”
The US unveiled significant semiconductor export controls in October, which ban Chinese companies from buying advanced chips and chip-making equipment without a licence over national security concerns.
Chips are used in most of today’s technology, but increasingly have militaristic applications.
However, China launched a trade dispute with the World Trade Organisation (WTO) yesterday, calling the US curbs “trade protectionism”.
“China’s filing of a lawsuit at the WTO is to resolve China’s concerns through legal means and is a necessary way to defend its legitimate rights and interests,” China’s commerce ministry said in a statement.
The ministry urged Washington to “give up zero-sum thinking”, adding that the US’ new rules threaten the stability of the global chip supply chain.
China is reportedly crafting a $143bn (£116.5bn) package to support its semiconductor industry, as it tackles new US trading curbs with the WTO.
The package would be a major pillar in sustaining its chips sector, which is currently fielding attempts from the US to slow its technological advances.
Beijing plans to roll out the package – which seeks to rival the US’ $52bn worth of fiscal incentives – over the next five years, starting as soon as the first quarter of next year, according to a report by Reuters yesterday, citing three sources.
Most of the capital is expected to go towards bringing more semiconductor fabrication plants under Chinese ownership, sources said.
Semiconductor companies are thought to be entitled to up subsidies worth 20 per cent of the cost of purchasing new equipment or facilities.
City A.M. has contacted Alibaba for comment.