EU Companies Complain that Chinese Sanction Favors U.S. Tech Firms

Posted on December 25, 2020 by Paul Thurrott in Cloud with 12 Comments

EU tech firms complain the U.S. sanctions against Huawei and SMIC shuts them out of the Chinese tech market while U.S. tech firms can get exceptions. It’s a non-obvious side effect of the sanctions that almost certainly wasn’t an accident given the outgoing presidential administration’s “America First” trade policies.

“So far, US companies have been given licenses to supply Huawei, while European suppliers cannot,” an unnamed EU tech executive told The Financial Times.

A second source told the publication that their European tech firm could no longer supply components to Chinese firms because of suspicions that they’d be used for military purposes. But U.S. firms were allowed to supply the same components to the same Chinese companies.

“Europe must be careful not to be crushed in the competition for technological leadership between the USA and China,” Reinhard Ploss, the CEO of Germany-based Infineon, told CNBC. “The geopolitical tension between the two superpowers (is) a big concern because we think we should not focus on countries, we should focus on the needs of our global society.”

ASML, a Netherlands-based firm, is likewise prevented from selling its newest-generation hardware to China-based chipmaker SMIC. China normally represents 25 percent of its revenues.

Despite the complaints, some non-U.S. firms have gotten exceptions from China sanctions, including Samsung, which is based in South Korea, and Sony, from Japan. But the U.S.-centric nature of the sanctions could still have far-reaching consequences: As is the case in China, European governments now want to be less dependent on U.S. technologies.

“This process was accelerated by the US sanctions,” a European diplomat told The Financial Times. “For European companies, China is such a big market that they need to find ways of serving it.”

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Comments (14)

14 responses to “EU Companies Complain that Chinese Sanction Favors U.S. Tech Firms”

  1. Greg Green

    ASML has 5 locations in the US, I would think that would be enough to be 'American.' Maybe they need better lawyers. Or lobbyists, I don't know which is cheaper.

  2. atimms

    Nit pick, isn't it EU sanctions? Sure they are echoing the US but they are imposed by the EU on EU companies. As the story says it's just that they've not implemented exceptions as the US has.

  3. nbplopes

    So US companies can on mass move their production to Asia, heck not move, actually hire Asian production in particular native to China ... for the sake of lower labor costs meaning higher margins. Is it to be expected than that Asia, in particular China does not than learn about what is being produced and build on top? I mean, I would they be able to produce something that they don’t know anything about its after so long?

    Honestely, not even espionage would be necessary. A simple social learning effect would resonate this output after 3 decades of this practice.


  4. melinau

    Hopefully USA's rather silly position vis-a-vis China will alter with the new administration, though I doubt the various banssanctions will be removed. What should happen is that these are made consistent & fair and based on logic, not Trump's irrational & absurd prejudices.

  5. wright_is

    In reply to truerock2:

    Yes, but US companies can trade with China, despite the US trade embargoes, but European companies can't, because the US won't let them. That is the point.

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