Girl caught smuggling semiconductors into China

Border officers stated on Thursday the girl was arrested on Nov. 25 carrying 202 processors and 9 smartphones beneath a big being pregnant prosthetic, Bloomberg reported. She initially aroused suspicion after claiming to be “about 5 – 6 months pregnant however had an enormous stomach that regarded like she was within the third trimester.”  

The mixture of excessive home demand and an especially constricted provide of semiconductors has created a bustling underground marketplace for microchips in China, the place second-hand or out-of-date chips can fetch 500 occasions their unique value.

Semiconductor chips have been in acute scarcity in China since 2020 when a world shortage of chips brought on by COVID-19 provide chain disruptions upended each side of the Chinese language tech business. The scarcity has worsened since October 2022, when the U.S. imposed sweeping curbs on the export of semiconductors made with U.S. expertise. The export curbs have been designed to chop off China’s provide of vital expertise that it could have been utilizing for superior computing and weapons manufacturing.

Whereas China’s secondary chip market existed earlier than the semiconductor crunch, it has ballooned in latest months as extra folks have sensed a chance to revenue. “Everybody’s a speculator,” an unauthorized dealer of semiconductor chips informed Bloomberg.

Kneecapping China’s business

China consumes greater than three-quarters of the world’s semiconductors however produces solely about 15% of world output. With the decline within the commerce of semiconductor chips, this imbalance is most noticeable in China’s automotive business.

As automotive producers try and pivot from inside combustion to electrical engines, substandard chips are infiltrating the availability chain, placing automotive high quality and security coming in danger. In response to one unauthorized dealer who spoke to Bloomberg, the “typical system whereby auto suppliers place an order by means of a certified agent and watch for distribution from an unique chipmaker now not works.”

With China’s semiconductor disaster solely trying to worsen within the coming yr, the U.S. chip ban is being described as a “huge escalation” within the commerce and geopolitical tensions between the U.S. and China, in accordance with Invoice Bishop, a seasoned China analyst and writer of the Sinocism e-newsletter.

Analysis analyst agency GlobalData stated the U.S. chip ban “transcends the semiconductor business” and was about nothing lower than the management of the world financial system. “That is about [artificial intelligence] dominance,” stated Josep Bori, the agency’s thematic analysis director.

China, which has known as the American choice to tighten export controls a violation of worldwide commerce guidelines that may “isolate and backfire” on the U.S., might now be taking a look at take cost of Taiwan’s booming semiconductor business.

“You’ll be able to argue that by depriving the Chinese language of entry to semiconductors, we up the danger that they seize Taiwan,” Hedge fund Citadel CEO Ken Griffin stated in a latest interview.  

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