US curbs on chip and equipment exports to China since 2020 were meant to slow China down, yet China's share of the global semiconductor industry rose 18% between 2017 and 2023, with Europe, Japan and Singapore taking the orders.
Since 2020, both US parties have taken turns tightening the rules on selling chips and chipmaking equipment to China, and exports of American chips there have fallen by 22% to 36%. The goal was clear: slow China down as a chipmaker.
It did not work. The money did not vanish, it just moved from American firms to everyone else.
The numbers say the opposite
A European Commission study contains one chart that stands out: ban after ban, and China's share of the global semiconductor industry still rose 18% between 2017 and 2023.
The most advanced technology was not stopped either. Just 11 months after the CHIPS and Science Act took effect in 2022, Huawei showed off a phone built on exactly the kind of technology the bans were supposed to deny it.
Who quietly took the orders
With the US out, China bought from the EU, Japan and Singapore instead, while South Korea and Malaysia picked up some extra business, too small to be statistically significant. Only Taiwan's exports to China fell in step with America's.
The author, a European, offers Washington a wry thank-you: thanks to you, our local chip industry has work.
Why it matters
Sanctions aim at an adversary but end up reallocating business among allies. Once export controls become a unilateral move, the best protected party is often not the one the rules were written for, but the third-country suppliers who stay out of the fight and simply deliver.
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