The aim is not total decoupling but to ensure that China is at least 2 gens behind across the entire semiconductor spectrum.
Well, 14nm is already 2 generations behind, so why trying to block ASML on it?
This policy of ensuring China is 2 generations behind is the balancing act US policy makers calculate to maximize profits for their industries, also known as "National Security" interests. The cash cows are achieved at nodes below 14nm, which is currently 2 generations from the leading edge of mass produced nodes. Since it was publicized that SMIC was fabbing a 7nm process, this has panicked US think tanks who have realized that China is on the verge of having 2.5/3D packaged ICs that will be reasonably competitive with EUV fabbed ICs down to the 5nm node in all but power consumption. I believe this is why there was recent talk of restricting FinFET capable equipment from LAM, AMAT and KLA. This means they are now trying to keep China 3-4 or more generations behind. In other words, there are no limits to what China can be sanctioned. The bottom line is, wherever China can threaten their cash cows, that will then become a "National Security" threat and the policy adjusted accordingly.
But, more importantly, how can you think to sell US tools for nodes where there is already Chinese local competition but not for the others? This makes no sense at all. Once a Chinese firm switches to a localized solution they will not turn back.
This kind of export control rationale works as long as the sanctioned state has no local innovation capacity. It is a logic borne for arms control to prevent selling advanced weapons to technological way inferior states. A logic that US administration is now stretching to a very different scenario, clearly they are stretching too far and the basic assumptions upon which is built are no more valid. Here the elephant in the room is that China does have local innovation, and is even running on all cylinders on it!
The end result cannot be different from decoupling, at least for the Chinese side that will use only localized tools.
I cannot believe US administrators are so blind not to see it. I still believe they really aim at decoupling.
It's now an open secret that China had a successful trial of their 14nm process with domestic equipment. First, domestically fabbed 14nm chips will arrive, then 14nm 2.5/3D packaged chips, then 7nm chips, then 7nm 2.5/3D packaged chips before domestic EUV fabbed chips arrive. It's very obvious this will happen and when it does, China's unbeatable supply chain cost advantages will annihilate any American led semiconductor alliance. Instead of cooperating and retaining some of their current SME and IC business, they want it all and are trying to monopolize what is already no longer their monopoly to control. Outside of the Golden Billion, there is 7 billion+ who will 100% be buying mostly Chinese made semiconductors for this reason, it won't matter if the semiconductor supply chains will be split between the American led side or Chinese side at that time.
As to why American policy makers, think tanks and analysts continue with these self defeating trade sanctions when China already developed most of their own equipment, we only need to look at their own words and their own behavior. How many times have the words "China stole and copied everything, China cheated here there everywhere"? China cannot innovate! This is some sort of ideologically induced mass delusion with alot of dare we say it, "RACISM". Bottom line is, American policy makers / think tanks just can't stop kicking themselves in the balls. It's like trying to teach morons quantum physics. As Napolean said, "Never interrupt your enemy when he is making a mistake".
