Technology restrictions on China became serious after Alibaba was reportedly not allowed to buy the latest chips manufactured by ARM. According to the Financial Times, the Neoverse V1 and Neoverse V2 chips designed for cloud computing cannot be sold to Alibaba because they would be blocked by the United States and the UK.
The technology on these chips originates from the United States and based on previously issued directives permission from the country of origin is required before they can be sold to China. Alibaba needs the latest chips for their cloud computing system. Without this chip their ability to offer the best service to customers will be affected while giving an advantage to competitors like AWS.
The sale of smart chips made by AMD and NVIDIA to China has also been previously restricted. At the same time, China's ability to produce chips with the latest technology was also curtailed after the sale of lithography machines from Japan and the Netherlands was also blocked.
Through the approach of preventing the purchase of chips and the machines that produce them, America and its allies hope to prevent China from developing chips for military purposes.
In order to ensure that national interests are not stunted, China will reportedly spend RMB 1 trillion (~RM638 billion) in five years into the local chip industry so that the technology gap with the West can be narrowed.