Why US chip controls took a back seat at the Xi-Trump summit - South China Morning Post

The Xi-Trump summit of September 2026 marked a notable shift in US-China semiconductor diplomacy: export controls, once the defining wedge issue in bilateral tech relations, were conspicuously absent ... Read original →

The summit's silence on chip controls signals not détente but irrelevance. With Huawei and Cambricon commanding 80% of China's AI server market, the 2022 export restrictions have lost their structural leverage. Beijing no longer needs to negotiate access it has already substituted domestically. The chokepoint has migrated downward. The real battleground is no longer EUV but DUV immersion lithography. If the Match Act extends US restrictions to allied jurisdictions, ASML's DUV systems become the new front line. China will accelerate domestic DUV capacity and alternative patterning within 18 months, restructuring the entire mid-node supply chain. Nvidia's "compliance chip" model is structurally dead. The H20 ban eliminates the last revenue bridge into a market that no longer needs it. AMD faces identical compression. ASML confronts jurisdictional fragmentation—one design, two regulatory regimes—driving operational costs up an estimated 15-20%. Rare earth export controls have replaced chip access as Beijing's primary counter-leverage. Over the next 12-24 months, expect complete bifurcation in AI silicon. The "compliance tier" vanishes. DUV becomes the new strategic asset. The summit's silence is the sound of a market that has already decoupled.