US chip export restrictions may actually be an advantage for China's AI Infrastructure. Chinese companies are forced to speed up developing their own AI chips
China themselves recognize this. After Trump relaxed sanctions and allowed NVIDIA H200 sales to China on a case by case basis, the Chinese government stepped in to essentially block it!
In addition to Huawei who make the Ascend series that Ziphu are using, there are also at least a half dozen or so other Chinese companies also making their own AI accelerators.
And this wouldn't have happened if we had tried to get them to buy our hardware rather than trying to gatekeep. Protectionism never works in the long term.
Look at how China does it. They'll happily sell us everything we want - more than enough of it, cheap enough, to put all of our own manufacturers out of business.
US companies should now be more worried about Chinese companies flooding the market with their, hopefully, very affordable GPU's. The scale at which they can manufacture stuff is unmatched anywhere else. Nvidia can kiss goodbye to their 75%+ profit margins.
Almost everyone knew that these sanctions would backfire within a few years. You can't really put sanctions that have noticeable negative effects on bigger economies. They only work for small to medium economies. I believe sanctions on any economy in top 10 would fail.
pretty sure they'll be fine for a while, between the build out and import bans, I don't expect demand to slow enough to let supply catch up
Nvidia are likely more concerned about AMD taking market share, and I suspect that geopolitics will leave US/China GPUs with largely non overlpping customer bases.
I've got to wonder how long the US will still be able get much of the world to go along with requests like this. Europe is already showing some spine and refused to join Trump's war with Iran, and Italy and Spain have also recently shown Trump the middle finger.
It'd be ironic if Europe ended up banning ASML (a Dutch company) from shipping to US instead!
SCOTUS shutting down Trump's Tantrum Tariffs gave everyone a little breathing room
Mark Carney said earlier today at the EU, "the goal is not self-sufficiency, but collective resilience." It is through collective action that they can find more resilience to our American Antics.
>It'd be ironic if Europe ended up banning ASML (a Dutch company) from shipping to US instead!
ASML's Dutch EUV machines depend on importing US made EUV light sources from California to build them, and depends on sales of their machines to the US to stay afloat since they're not exactly flying off the shelves domestically.
So maybe the EU is not that stupid and suicidal to cripple their economy further by cutting off one of their biggest pay-piggies for no reason.
In fact, as an anecdote to your hypothetically scenario, the US is the one with the most leverage since if they want, they can ban the export of EUV light sources to ASML and sell them instead to Canon and Nikon, sinking ASML and propping up Japan's semi industry instead, if relations sour and they see Japan as a warmer ally than the EU. Hypothetical.
China is gated by not having EUV machine access. They're also bottlenecked by ASML's DUV machine production like everyone else. There are already talks of banning China from even purchasing DUV machines from ASML.
So until China solves the ASML problem, there won't be any flooding.
Which they are in progress on: <a href="https://www.reuters.com/world/china/how-china-built-its-manhattan-project-rival-west-ai-chips-2025-12-17/" rel="nofollow">https://www.reuters.com/world/china/how-china-built-its-manh...
They've overcome every hurdle to go from nothing to having working machines, so all these questions are presumably a matter of how fast they will improve and ramp up production (initially 5 this year, 20 next year), not whether they will.
China have been really squeezing all they can out of DUV machines, but I'm not sure how much node size really matters for AI competition - more of a cost issue (more chips/power for same FLOPs) than anything, and TSMC & NVIDIA's healthy profit margins need to be considered too.
They already have working machines, and are slated to ship the first 5 early production ones right about now (before the end of 2026), and are projecting 20 for next year.
Small numbers perhaps, but this is happening right now.
What will the numbers be in 5-10 years time? Who knows, but ASML took about 5 years to go from 20/yr to 100+/yr.
Of course politically the world may well be quite different in 5 years time, as may be the AI market.
Same thing with Trump not helping Ukraine and berating NATO. He thought he held all the cards, but now Ukraine has a thriving battle-tested drone industry, UK and France have stepped in to replace the US with advanced missiles and anti-missile systems, stepping up their own production and transferring IP to Ukraine.
Now, the US is left out in the cold with little influence left, themselves now the ones with an anti-missile shortage.
You seem to misunderstand what Protectionism is.
This is not an example of it not working. If anything, it is any example of it working. Because Protectionism is about protecting your industry from foreign competition - exactly what China decided to do.
There seems to be a belief that the post-war 20th century order would be a fixed feature rather than a contingency of history. That the US would be #1, Europe #2, and the rest of the world would remain "developing" in rural poverty forever. That somehow China could be prevented from catching up. Now they are, and behind them India. I think people are going to be even more surprised in the latter half of the 21st century when South America and Africa start catching up as well.
Brazil is one to watch if they manage to achieve political stability, as is Nigeria if it can transition from being a petrostate.
And the end started when China was admitted to the WTO. They had this huge cheap labor force, a government that could centrally plan (in addition to ignoring little things like environmentalism or rights), and an immense wealth of resources. It was like a bunch of sheep letting a baby wolf into the barn. Now the wolf's all grown up.
Nothing, but if you believe that laissez-faire capitalism is tautologically good then you can't blame your capitalist overlords for selling your job to China and refusing to backfill it, so you must blame China for developing themselves instead.
I’m under the impression that industrial policy has been pretty good for some Asian companies but there have also been notorious failures like the Jones Act.
So I think it can be summarized as “it all depends” and “skill issue.”
zicohacks · · focus · HN ↗
HarHarVeryFunny · · focus · HN ↗
In addition to Huawei who make the Ascend series that Ziphu are using, there are also at least a half dozen or so other Chinese companies also making their own AI accelerators.
0xbadcafebee · · focus · HN ↗
ipsod · · focus · HN ↗
Seems to work for them.
freakynit · · focus · HN ↗
Almost everyone knew that these sanctions would backfire within a few years. You can't really put sanctions that have noticeable negative effects on bigger economies. They only work for small to medium economies. I believe sanctions on any economy in top 10 would fail.
verdverm · · focus · HN ↗
Nvidia are likely more concerned about AMD taking market share, and I suspect that geopolitics will leave US/China GPUs with largely non overlpping customer bases.
overfeed · · focus · HN ↗
That's not what's happening in the auto-industry, Chinese EVs are easily outselling American ones. Why would GPUs be any different?
verdverm · · focus · HN ↗
This is another example where we might ask "why would it be any different?"
HarHarVeryFunny · · focus · HN ↗
It'd be ironic if Europe ended up banning ASML (a Dutch company) from shipping to US instead!
verdverm · · focus · HN ↗
Mark Carney said earlier today at the EU, "the goal is not self-sufficiency, but collective resilience." It is through collective action that they can find more resilience to our American Antics.
PorciiVorbesc · · focus · HN ↗
ASML's Dutch EUV machines depend on importing US made EUV light sources from California to build them, and depends on sales of their machines to the US to stay afloat since they're not exactly flying off the shelves domestically.
So maybe the EU is not that stupid and suicidal to cripple their economy further by cutting off one of their biggest pay-piggies for no reason.
In fact, as an anecdote to your hypothetically scenario, the US is the one with the most leverage since if they want, they can ban the export of EUV light sources to ASML and sell them instead to Canon and Nikon, sinking ASML and propping up Japan's semi industry instead, if relations sour and they see Japan as a warmer ally than the EU. Hypothetical.
HarHarVeryFunny · · focus · HN ↗
FYI, the US is only 10-15% of ASML's sales. The bulk of their machines go to China, Taiwan and South Korea.
PorciiVorbesc · · focus · HN ↗
It's on US soil and subject to US laws and export controls. That's all that matters.
HarHarVeryFunny · · focus · HN ↗
PorciiVorbesc · · focus · HN ↗
aurareturn · · focus · HN ↗
So until China solves the ASML problem, there won't be any flooding.
HarHarVeryFunny · · focus · HN ↗
A bit late for that now that they are moving into early production with their own.
Catloafdev · · focus · HN ↗
Which they are in progress on: <a href="https://www.reuters.com/world/china/how-china-built-its-manhattan-project-rival-west-ai-chips-2025-12-17/" rel="nofollow">https://www.reuters.com/world/china/how-china-built-its-manh...
aurareturn · · focus · HN ↗
HarHarVeryFunny · · focus · HN ↗
China have been really squeezing all they can out of DUV machines, but I'm not sure how much node size really matters for AI competition - more of a cost issue (more chips/power for same FLOPs) than anything, and TSMC & NVIDIA's healthy profit margins need to be considered too.
aurareturn · · focus · HN ↗
What is the timeline like? 1 year? 5 years? 10 years?
HarHarVeryFunny · · focus · HN ↗
Small numbers perhaps, but this is happening right now.
What will the numbers be in 5-10 years time? Who knows, but ASML took about 5 years to go from 20/yr to 100+/yr.
Of course politically the world may well be quite different in 5 years time, as may be the AI market.
aurareturn · · focus · HN ↗
We also don't know how small of nm chips they can manufacture. If it's 20nm, it's practically useless for advanced AI chips.
HarHarVeryFunny · · focus · HN ↗
Now, the US is left out in the cold with little influence left, themselves now the ones with an anti-missile shortage.
ffsm8 · · focus · HN ↗
You seem to misunderstand what Protectionism is. This is not an example of it not working. If anything, it is any example of it working. Because Protectionism is about protecting your industry from foreign competition - exactly what China decided to do.
pjc50 · · focus · HN ↗
Brazil is one to watch if they manage to achieve political stability, as is Nigeria if it can transition from being a petrostate.
0xbadcafebee · · focus · HN ↗
my-huge-pony · · focus · HN ↗
smallmancontrov · · focus · HN ↗
AuthAuth · · focus · HN ↗
mitxela · · focus · HN ↗
pjc50 · · focus · HN ↗
skybrian · · focus · HN ↗
So I think it can be summarized as “it all depends” and “skill issue.”