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China eyes countermeasures against US chip curbs

Washington’s latest restrictions on semiconductor exports to China have heightened trade tensions between the world’s two largest economies, fueling concerns about potential Chinese countermeasures. Beijing, which has vowed to protect its interests, possesses several tools to retaliate against US firms, including tightened security reviews and trade restrictions.

China has already wielded security reviews against US companies, such as barring government purchases of Micron products in 2022. Analysts warn Intel, a significant player in China’s chip market, could face similar scrutiny. Additionally, US firms have historically reported bureaucratic hurdles like customs delays and intensified inspections during strained relations, underscoring the broader risks of doing business in China.

Beijing also maintains its ‘unreliable entities list,’ targeting foreign companies that are seen as violating Chinese interests. Actions under this framework include probes into firms like PVH Corp for compliance with US restrictions on Xinjiang cotton. Meanwhile, export controls on critical minerals, such as gallium and graphite—key to chipmaking and electric vehicles—are emerging as another leverage point in the escalating trade conflict.

China’s expanded oversight of dual-use technologies, effective December 1, adds another layer of control. By regulating items with civilian and military applications, Beijing aims to monitor US reliance on its supply chains. As tensions rise, both sides face economic and technological repercussions that could redefine global trade dynamics.

China boosts localisation after US chip curbs

Chinese semiconductor firms targeted by new US export controls are doubling down on localising their supply chains and leveraging stockpiled resources to maintain production. The restrictions, the third major US crackdown in three years, impact 140 companies and focus on chipmaking equipment, software, and high-bandwidth memory. Despite the curbs, Chinese chip stocks saw slight gains as analysts noted the measures were less severe than expected.

Key companies like Naura Technology and Empyrean have vowed to accelerate domestic technology development. Some, such as Beijing Huafeng Test & Control Technology, reported fully localised supply chains. While the measures hit China’s reliance on foreign manufacturing equipment, imports of semiconductor machinery surged by a third this year, showing resilience in the face of external pressures.

The exclusion of ChangXin Memory Technologies (CXMT), a major AI chip component maker, surprised analysts. The move eased concerns for South Korean suppliers reliant on Chinese revenue, with shares of key partners like Jusung Engineering and Mirae Corp rebounding. The latest curbs reflect ongoing efforts to balance US security goals with the global semiconductor market’s interdependencies.

Apple sued over worker monitoring claims

A new lawsuit accuses Apple of illegally surveilling employees’ personal devices and iCloud accounts while restricting discussions about pay and workplace conditions. Filed in California by Amar Bhakta, a digital advertising employee, the suit claims Apple mandates software installations on personal devices used for work, enabling access to private data such as emails, photos, and health information. The lawsuit also alleges Apple enforces confidentiality policies that hinder whistleblowing and discussions about working conditions.

Bhakta asserts he was instructed to avoid discussing his work on podcasts and remove job-related details from LinkedIn. The complaint argues these practices suppress employee rights, including whistleblowing and job market mobility. Apple denies the claims, stating they lack merit and emphasising its commitment to employee training on workplace rights.

This case joins other legal challenges faced by Apple, including allegations of underpaying female employees and discouraging discussions about workplace bias and pay disparity. Filed under a California law allowing workers to sue on behalf of the state, the lawsuit could lead to penalties, with a portion allocated to employees bringing the claims.

US tightens chip curbs on China in major crackdown

The United States has imposed its third major round of export controls on China’s semiconductor industry in three years, targeting 140 companies with restrictions on chipmaking equipment, software, and advanced memory chips. Among those affected are prominent firms like Naura Technology, ACM Research, and SiCarrier Technology, as well as entities linked to Huawei, a key player in China’s chip advancements.

The measures, aimed at stalling China’s progress in AI and military technologies, also introduce new licensing requirements for US and foreign companies shipping equipment with US components to China. Commerce Secretary Gina Raimondo stated the restrictions are intended to block China’s military modernisation. Despite the sanctions, Chinese officials condemned the move as “economic coercion” and vowed countermeasures.

The rules also impact allies, with restrictions extending to chipmaking equipment from countries like Singapore and South Korea, while Japan and the Netherlands are exempt. Some global players, including Dutch firm ASML, downplayed the immediate impact but acknowledged potential long-term effects. These actions come as China accelerates efforts toward self-sufficiency in semiconductor production, though it remains years behind industry leaders like Nvidia and ASML.

This latest crackdown follows the sweeping 2022 curbs on high-end chips and manufacturing tools under the Biden administration, reflecting a sustained US effort to curtail China’s access to critical technologies.

US tightens semiconductor export curbs on China

The United States will implement sweeping new restrictions on semiconductor exports to China starting Monday, targeting 140 Chinese firms to curb Beijing’s technological advancements, especially in AI and military applications. The measures, part of the Biden administration’s continued crackdown on China’s chip industry, include export controls on high-bandwidth memory (HBM) chips, 24 chipmaking tools, and advanced semiconductor equipment manufactured in countries like Singapore and Malaysia.

Among the companies affected are major Chinese chip equipment makers such as Naura Technology Group and Piotech, alongside firms tied to Huawei, which remains central to China’s chipmaking ambitions. Nearly two dozen additional semiconductor and investment firms will be added to the US Entity List, severely restricting their access to American technology. In response, Chinese officials criticised the move, claiming it undermines global trade and supply chains while vowing to protect their firms’ interests.

The restrictions also expand the foreign direct product rule, giving the US authority to regulate exports to China of equipment containing even minimal American technology. This move could disrupt global suppliers, although Japan and the Netherlands are exempt due to their collaboration with the US on similar controls. The crackdown follows a broader US strategy to limit China’s ability to compete in advanced technologies, building on export curbs introduced in 2022.

Despite China’s efforts to become self-reliant in semiconductors, it remains years behind global leaders like Nvidia and ASML. Meanwhile, the restrictions are expected to hit companies such as Lam Research, Applied Materials, and Samsung, which derives a significant share of its HBM chip revenue from China. With the upcoming administration of Donald Trump expected to maintain a hardline stance on China, the latest measures underscore ongoing US efforts to preserve its technological edge.

China vows response to US chip restrictions

China has issued a strong warning against potential new US export restrictions on semiconductor technology, signalling it could take ‘necessary actions’ to safeguard its firms. The warning follows reports suggesting the Biden administration may expand its trade blacklist, potentially adding up to 200 Chinese chip companies to the list. Such measures would limit US suppliers from trading with these firms.

Chinese commerce ministry spokesperson He Yadong condemned the US for what he described as overreach in the name of national security. He argued the proposed controls destabilise global trade and harm bilateral cooperation in the semiconductor sector. He emphasised China’s determination to defend its companies’ rights if the US persists with its actions.

Reports indicate that the Biden administration is mulling restrictions on semiconductor equipment and AI memory chip sales to China. These measures may target firms like Semiconductor Manufacturing International Corp., a Huawei ally, while sparing ChangXin Memory Technologies, a rising AI memory chip developer.

The tensions come as the outgoing Biden administration faces domestic and international scrutiny over trade policies. Meanwhile, there is concern that President-elect Donald Trump’s proposed tariffs on Chinese goods could further inflame trade relations, with Beijing warning that such measures would fail to address US domestic issues effectively.

Mixed reactions as Australia bans social media for minors

Australia’s recent approval of a social media ban for children under 16 has sparked mixed reactions nationwide. While the government argues that the law sets a global benchmark for protecting youth from harmful online content, critics, including tech giants like TikTok, warn that it could push minors to darker corners of the internet. The law, which will fine platforms like Meta’s Facebook, Instagram and TikTok up to A$49.5 million if they fail to enforce it, takes effect one year after a trial period begins in January.

Prime Minister Anthony Albanese emphasised the importance of protecting children’s physical and mental health, citing the harmful impact of social media on body image and misogynistic content. Despite widespread support—77% of Australians back the measure—many are divided. Some, like Sydney resident Francesca Sambas, approve of the ban, citing concerns over inappropriate content, while others, like Shon Klose, view it as an overreach that undermines democracy. Young people, however, expressed their intent to bypass the restrictions, with 11-year-old Emma Wakefield saying she would find ways to access social media secretly.

This ban positions Australia as the first country to impose such a strict regulation, ahead of other countries like France and several US states that have restrictions based on parental consent. The swift passage of the law, which was fast-tracked through parliament, has drawn criticism from social media companies, which argue the law was rushed and lacked proper scrutiny. TikTok, in particular, warned that the law could worsen risks to children rather than protect them.

The move has also raised concerns about Australia’s relationship with the United States, as figures like Elon Musk have criticised the law as a potential overreach. However, Albanese defended the law, drawing parallels to age-based restrictions on alcohol, and reassured parents that while enforcement may not be perfect, it’s a necessary step to protect children online.

Chip stocks rise as US restrictions on China may ease

European chip equipment stocks surged on Thursday following reports that upcoming US restrictions on China’s semiconductor industry might be less stringent than anticipated. Shares of ASML, a leading supplier of semiconductor tools, rose by 4.3%, while competitors BE Semiconductor and ASM International climbed 5% and 2.9%, respectively, outperforming the STOXX 600 index.

According to Bloomberg, the US may exclude Chinese memory chipmaker ChangXin Memory Technologies (CXMT) from its trade restrictions, though details remain uncertain. The US Commerce Department, which oversees export rules, is expected to release updated guidance after Thanksgiving.

ASML, which has seen a sharp decline in sales to China over recent quarters, declined to comment. The company previously projected that sales to China would shrink to 20% of its revenue by 2025, down from nearly half in the last 18 months. Other global semiconductor equipment suppliers, including US-based Applied Materials and Tokyo Electron, are also closely monitoring the situation.

Microsoft rejects AI training allegations

Microsoft has refuted allegations that it uses data from its Microsoft 365 applications, including Word and Excel, to train AI models. These claims surfaced online, with users pointing to the need to opt out of the ‘connected experiences’ feature as a possible loophole for data usage.

A Microsoft spokesperson stated categorically that customer data from both consumer and commercial Microsoft 365 applications is not utilised to train large language models. The spokesperson clarified in an email to Reuters that such suggestions were ‘untrue.’

The company explained that the ‘connected experiences’ feature is designed to support functionalities like co-authoring and cloud storage, rather than contributing to AI training. These assurances aim to address user concerns over potential misuse of their data.

Ongoing discussions on social media underscore persistent public worries about privacy and data security in AI development. Questions about data usage policies continue to highlight the need for transparency from technology companies.

FTC challenges Microsoft over cloud practices

The US Federal Trade Commission (FTC) has launched a wide-reaching antitrust investigation into Microsoft’s business practices, focusing on cloud computing, software licensing, and artificial intelligence. Allegations suggest the company has imposed restrictive licensing terms that make it difficult for customers to switch from its Azure cloud services to rival platforms. FTC Chair Lina Khan approved the probe ahead of her expected departure in January, raising questions about its future under a potentially business-friendlier administration.

Critics, including competitors and industry groups like NetChoice, claim Microsoft’s licensing policies unfairly lock customers into its ecosystem. Google has raised similar concerns with European regulators, citing significant mark-ups for using Windows Server on competing cloud services and delays in providing security updates. The FTC’s investigation also touches on broader competition concerns in AI and cybersecurity, including Microsoft’s acquisition of AI startup Inflection AI.

Microsoft has not commented on the probe, but complaints have mounted over its practices in cloud computing and the integration of AI tools into productivity products like Office and Outlook. Some industry observers note that Microsoft has been relatively spared in recent US antitrust actions targeting Big Tech firms, including Apple, Google, Meta, and Amazon. However, the FTC’s focus on Microsoft could signal a shift in regulatory priorities.

The outcome of the investigation remains uncertain, particularly with a potential change in the political landscape. While the Trump administration previously pursued aggressive antitrust enforcement, including actions against Google and Meta, Microsoft has benefited from its policies in the past, such as winning a contentious $10 billion Pentagon cloud contract over Amazon. Experts believe a new administration may alter enforcement priorities but not necessarily halt ongoing probes.