86: Chapter 86 Imperial Counterattack, Midnight Thunder

Washington's Precision Snipe

Washington time, August 9th, 3:00 PM. Under the spotlights of the White House press briefing room, Ms. Raimondo, the Secretary of the United States Department of Commerce, stood behind the podium with a serious expression, a thick stack of documents piled before her. Without any opening pleasantries, she directly read the statement destined to shake the global technology industry:

“Pursuant to the Export Control Reform Act and national security assessments, the Bureau of Industry and Security (BIS) of the Department of Commerce has decided to add the China Spark Technology Group and all its subsidiaries, sub-subsidiaries, and affiliated entities in which it holds a stake of more than 10% to the Entity List.”

A suppressed stir rippled through the press gallery below, and camera flashes instantly merged into a continuous sheet of light.

Raimondo raised her voice, reading out the cold, scalpel-like terms item by item:

“First, effective immediately. Any product, equipment, software, or technical service containing more than 10% U.S. technology components is prohibited from export, re-export, or in-country transfer to entities on the list without a special license.”

“Second, a comprehensive ban on U.S. citizens and permanent residents (Green Card holders) providing any direct or indirect services involving restricted technology—such as research and development, production, or maintenance—to entities on the list.”

“Third, invocation of the ‘Foreign Direct Product Rule.’ Any semiconductor product manufactured using U.S. equipment, software, or technology, regardless of its place of origin, is prohibited from being sold to Spark Technology and its affiliates.”

She paused, her sharp gaze sweeping across the cameras: “The scope of this control specifically includes, but is not limited to: Electronic Design Automation (EDA) software used for chip design; photolithography machines, etching machines, and thin-film deposition equipment used for chip manufacturing; critical materials used for chip production, such as high-purity silicon wafers, photoresists, and specialty gases; as well as advanced chip manufacturing and testing services.”

“For goods and services already in transit,” her tone left no room for negotiation, “relevant companies must initiate recall procedures within 24 hours. We are coordinating closely with our global allies and partners to ensure this decision is effectively enforced.”

A reporter asked impatiently: “Madam Secretary, does this mean the sanctions against Spark have escalated to the level of a ‘total blockade’? Is the goal to stifle its chip self-sufficiency plan?”

Raimondo did not answer directly, merely stating coolly: “America has a responsibility to protect its critical technology and national security from threats. Our actions are based on clear evidence and thorough assessment. Spark Technology's actions in the field of dual-use technology pose an unacceptable risk to the security and stability of the global semiconductor supply chain.”

The press conference lasted only fifteen minutes, but the chill it released instantly froze time and space from Washington to Shenzhen.

Midnight in Shenzhen: A Telephone Ring Pierces the Silence

Beijing time, August 10th, 3:15 AM.

In Shenzhen, Su Chen was sleeping lightly in the study of his penthouse apartment. Days of intense work meant his brow remained furrowed even in his dreams. The private phone on the nightstand suddenly vibrated frantically, the name 'Shen Nanpeng' flashing continuously on the screen.

Su Chen was instantly awake, his heart skipping a beat the moment he saw the time. An emergency call at this hour never brought good news.

“Nanpeng?” His voice was still raspy from sleep, but filled with alertness.

On the other end of the line, Shen Nanpeng's voice was exceptionally tight, even somewhat distorted: “President Su, the U.S.... has made its move. The Department of Commerce just held a press conference. It’s not a routine escalation of sanctions... it’s a total embargo. It’s ten times harsher than the worst-case scenario we imagined.”

Almost simultaneously, the encrypted laptop screen on the desk lit up automatically, and a video request from Lin Wan popped up. Su Chen answered it while using his other phone to quickly browse the breaking international headlines being pushed to him.

Lin Wan appeared on the screen, the background being the operations command center at Xinghuo Headquarters. Her face was pale, but her eyes were steady: “Su Chen, we’ve received five emergency system alert emails.”

She reported at a rapid pace:

“First, ASML (the Dutch photolithography giant) has notified us of the suspension of all processes for the NXE:3400C EUV photolithography machine scheduled for delivery at the end of this month, citing ‘inability to obtain the necessary export license.’ That machine is worth 120 million euros and is critical to our 14nm process R&D.”

“Second, Applied Materials (the largest U.S. semiconductor equipment manufacturer) has notified us that, effective immediately, they are stopping all remote technical support, spare parts supply, and on-site maintenance services for all sold equipment. 70% of the critical equipment on our production lines comes from them.”

“Third, TSMC has formally notified us of the cancellation of all uncompleted foundry orders for 28nm and below processes and is suspending further orders. Our subsequent iterations of the ‘flint one’ chip and the ‘flint no. 2’ trial production tape-outs all rely on TSMC.”

“Fourth, Synopsys (the U.S. EDA giant) has frozen all our EDA software tool licenses and update services. The design department... might be unable to function normally in half an hour.”

“And... an emergency personnel report from our chip team: 37 Chinese-American engineers in the team who hold U.S. Green Cards or citizenship have successively received warning emails from the company's compliance department, requiring them to immediately assess whether their employment relationship with Spark violates U.S. law.”

Every piece of information was like a pair of cold tweezers, precisely snapping a link in the chain of Spark's chip self-sufficiency.

Su Chen's knuckles turned white from the force with which he gripped his phone, but no expression of losing control appeared on his face. He was silent for about ten seconds. In those ten seconds, chip design flowcharts, equipment lists, talent files, and that recently updated, hope-filled shareholder alliance chart flashed rapidly through his mind.

“Notify all core management,” Su Chen’s voice was eerily calm, like a deep-sea cold current, “assemble in the penthouse crisis war room in one hour. Before I arrive, do three things.”

He gave clear instructions:

“First, Wan'er, you take the lead. Coordinate with the supply chain, R&D, and production departments to immediately conduct a comprehensive inventory and assessment of all affected supply chain links. From a single screw to a software license, list them in detail with their impact levels.”

“Second, Nanpeng, you are responsible for urgently contacting all possible domestic alternative suppliers, including Empyrean (EDA), Shanghai Micro Electronics Equipment (Photolithography), AMEC (Etching), NSIG (Silicon Wafers)... assess their technical capabilities, production capacity, and willingness to cooperate.”

“Third, notify HR and all department heads to fully reassure the teams, especially departments involving U.S. citizens and Green Card employees. Tell them clearly: the company understands everyone's situation and pressure, will not force anyone to make a choice against their personal will, and will provide all possible support and legal consultation. Stabilizing people's hearts is the first priority right now.”

The First Wave of the Public Opinion Tsunami

By 4:00 AM, global media had already been ignited by this bombshell.

CNN's news headline was startling: "America Imposes ‘chip Death Penalty’ on Chinese Tech Giant Spark." The report stated: “The breadth and depth of this round of sanctions are unprecedented, covering almost all key nodes of the entire chip design, manufacturing, and packaging chain. The intent is clear—to completely snuff out Spark's nascent advanced process chip R&D capabilities and lock it into the low-end of technology.”

Bloomberg News’s in-depth analysis was even more cold-blooded: “According to industry insider assessments, losing U.S. EDA software, high-end manufacturing equipment, and wafer foundry services, Spark Technology's ambitious 14nm and below chip R&D plans will face substantial death. Even if it turns to domestic or non-U.S. alternatives, the technical gap and lack of ecosystem could cause its progress to be delayed by more than three years and result in the permanent loss of the opportunity to compete with global leaders.”

Domestic media reacted quickly after a brief moment of shock. Global Times issued a strongly-worded editorial at 5:00 AM: “This is yet another iron-clad proof of America abusing national power to promote technological bullying and unilateralism. Its purpose is definitely not so-called ‘national security,’ but an attempt to stifle China's legitimate development in the high-tech field through improper means to maintain its technological monopoly. Such behavior violates market economy principles and international economic and trade rules; it is naked bandit logic. The Chinese government and enterprises will never sit idly by and will take all necessary measures to resolutely safeguard their legitimate rights, interests, and development space.”

The sky over Shenzhen, amidst a complex mix of panic, anger, and determination, gradually revealed a gray-white dawn.