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● China’s Chip Talent- Korea’s Crisis

China’s High-Tech Sanctions and the Reality of Innovation: The US, Advanced AI/Robotics, and TSMC’s Strategic Shift

In this article, we comprehensively summarize all the key points in context, including the growth drivers of Chinese AI and robotics companies, the advanced technology sanction issues among the US, China, and Taiwan, TSMC’s strategic shifts, semiconductor talent development, and the international technology hegemony competition within China.
From the background of China’s rapid high-tech growth, the US’s extreme sanctions on semiconductors, AI, and GPUs, the complex technological diplomacy landscape of Taiwan/TSMC, to the economic impact on the global market, this article contains insights that will enhance your ability to predict the future.
A complete summary and an SEO summary for practical economic blogs are also provided at the end of the article.

1. The US’s Intensified Sanctions on Chinese High-Tech, and China’s “Patience Strategy in Science and Technology”

• Deepening US Sanctions
  Technology regulations against China, which have been increasing in severity since the Trump administration, covering semiconductors, AI, and deep learning, have become even more aggressive under the Biden administration.
  Restrictions on exports to China even for products from major US companies like NVIDIA. Particularly extreme sanctions on H100, H20, advanced GPUs, and related AI hardware.
• China’s All-Out Response: Talent, Investment, and National System
  China is operating a science and technology ‘national system’ centered on the central government, emphasizing a “time strategy of patience” by abandoning short-term results.
  Concentration of national resources, gathering of researchers and scientists within China, return of overseas students, attraction of excellent foreign talent, massive R&D investment, and continuous training of large-scale engineers.
  Accelerating technological independence in generative AI, robotics, semiconductors, chip design, etc.
  The patriotic consciousness of Chinese science and technology leaders and young people, and ‘technological self-reliance’ are the driving forces behind China’s growth.

2. Qualitative and Quantitative Growth of China’s AI, Deep Learning, and Humanoid Robot Industries

• Domestic Talent and Innovative Enterprise Ecosystem
  Most of China’s leading AI companies, such as DeepSeek, are domestic. There are over 60 generative AI and robotics companies, and more than 170,000 robotics companies in total.
  Value chain of core components, SW, and parts/materials, targeting both domestic and international markets simultaneously.
• Bold Resource Input and Innovation Soil
  Focus on R&D led by state leaders and science-educated executives, excluding humanities majors.
  Practical materialistic tone rather than religious notions, strong sense of ‘community development’ among the younger generation.
• Abundant Talent Pool
  700,000 graduates majoring in semiconductors, information, electrical, and electronics engineering annually, constantly renewing the supply of advanced science and technology personnel each year. The total number of university students exceeds 10 million, with over 6 million in science and engineering.
• China GPU, Competing with NVIDIA
  Import sanctions are rapidly promoting domestic alternatives to GPUs. Although performance is still about 70-80% of US products, a ‘must-use market’ has arrived thanks to the wide domestic market. Huawei and Bytron are accelerating their own chip development.

3. Strategic Dilemma and Changes in Taiwan Semiconductor (TSMC)

• TSMC’s Global Position
  No. 1 in the global foundry market share and the core of global ICT hardware production. Core research and production concentrated only within Taiwan, even for the most advanced 3nm and 2nm processes.
• Triangular Relationship Among Taiwan-China-US
  Taiwanese companies may seem weak in brand recognition, but they are essential players in the global supply chain. ICT exports account for 65% of GDP (as of 2016, 15 Taiwanese companies in the TOP 20 of China→US exports).
• Taiwan’s Institutional Defense
  The most advanced R&D and processes are mandated to remain in Taiwan according to the N+1 policy. Only one generation older processes are built overseas, buffering the risk of technology leakage.
• TSMC Also Wants to Foster Competition
  Strategically hoping for the growth of Samsung Electronics and third-party competitors amid concerns about customer and global market dominance, and movements to de-TSMC technology.
• Overseas Expansion Inevitable Due to Manpower and Energy Limitations
  Limited to 22 million people in Taiwan, and shortages in semiconductor and research personnel. Bottlenecks in manpower supply, electricity, and water, with 70,000 TSMC employees and 10,000 ASML Taiwan employees.
  Diversifying risks by expanding factories in the US and Japan (Kumamoto, Arizona, etc.).

4. Competition in Tech Hegemony Among Korea, China, Japan, and Globally, and Economic Impacts

• China’s ‘Patience Strategy’ and Technological Self-Reliance
  US sanctions are rather connected to strengthening China’s intrinsic innovation awareness and technological independence.
  Accelerating localization across the board in GPUs, semiconductors, AI, humanoid/robots, IoT, and high-tech value chains.
• Evolution of Taiwan/TSMC’s Global Factory
  Distribution of factories, technology, and research, but leaving the most advanced in the homeland. Diversifying risks through multi-party competition and cooperation instead of monopoly, and diversifying the global supply chain.
• Impact on Korea and Globally
  Korean companies like Samsung Electronics inevitably responding to supply chain changes and new markets in the US, China, and Japan.
  The advanced technology war between TSMC, China, and the US is still prolonged, and Korean companies’ strategies may continue to change depending on the direction of technological hegemony.

< Summary >

US advanced technology sanctions have stimulated China’s technological independence and innovation ecosystem, and domestic companies and technologies are growing rapidly in various fields such as semiconductors, AI, and robotics.
Taiwan maintains a major role in the global supply chain of ICT hardware, and TSMC is diversifying its strategy between distributing monopoly risks and preventing technology leakage.
The technology hegemony competition among the three countries (US, China, Taiwan) is inevitably prolonged, and the global economic landscape is also changing rapidly accordingly.

China’s High-Tech Leap: Hegemony Competition with the US, Semiconductor Talent Revolution, and TSMC’s Global Strategic Shift

China is using US advanced technology, semiconductor, and AI sanctions as an opportunity for innovation and a stimulus for fostering engineers, rapidly growing its national technology with a ‘science and technology patience strategy’. Creative AI, deep learning, and robot innovation companies in China are promoting comprehensive internalization of massive manpower, investment, and even IT, SW, and parts. Meanwhile, Taiwan’s TSMC is leveraging its unrivaled competitive advantage in the global semiconductor foundry market to internalize advanced processes and diversify overseas factories, while also ‘distributing advanced technology risks’. The fierce tech hegemony competition among the US, China, and Taiwan has a significant direct and indirect impact on the global economy, including Korea, and the international economic landscape is expected to continue to change urgently, focusing on the keywords of semiconductors, AI, innovation, global supply chains, and advanced technology.

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