The Biden Administration is planning to hit China with more restrictions on chip supplies, as well as chipmaking technology!
Biden To Hit China With More Chip Restrictions!
Sources familiar with the matter just revealed to Channel News Asia that the Biden Administration plans to hit China with more more restrictions on chip supplies, as well as chipmaking technology.
In September 2022, the US Commerce Department intends to publish new regulations for the semiconductor industry, based on :
- restrictions that earlier applied only to KLA Corporation, Lam Research Corporation, and Applied Material Incorporated.
- restrictions that were recently enforced on AMD and NVIDIA
The first three US companies received letters from the US Commerce Department, explicitly forbidding them from exporting chipmaking equipment to Chinese factories that produce sub-14 nanometer semiconductors without special export licences.
AMD and NVIDIA, on the other hand, received letters informing them that they were now banned from selling high-performance AI chips to China (as well as Russia) without special export licences.
On top of those restrictions, the US Commerce Department will likely impose additional chip restrictions on China.
The US Chamber of Commerce claims last week that the Commerce Department plans to add more Chinese supercomputing entities to a trade blacklist.
Why Biden Is Introducing More Chip Restrictions On China
The US Commerce Department issued those 5 companies the so-called “is informed” letters to quickly impose restrictions without going through the lengthy rule-writing process, but they would only apply to companies that receive them.
That leaves open the possibility for other companies to bypass those restrictions, or offer comparable chips or technologies to the Chinese as an alternative.
For example, NVIDIA is banned from selling their A100 artificial intelligence chips to Chinese companies. However, China can still purchase servers containing NVIDIA A100 chips from Dell Technologies, Hewlett Packard Enterprise and Super Micro Computer.
Hence, the new regulations serve to codify those restrictions and apply them across the board, preventing those chips and technologies from “leaking” to China.
As a general rule, we look to codify any restrictions that are in is-informed letters with a regulatory change.
– Senior US Commerce Department official
The Biden Administration has also reached out to US allies to lobby them into enacting similar restrictions, to prevent China from obtaining critical chips and technologies through other sources.
This move comes after the US Congress voted to pass the historic CHIPS and Science Act, which not only provides semiconductor companies with billions of dollars of funding, but also blocks them from building advanced chip fabs in China.
The Biden Administration appears to be more cognisant than the Trump Administration of the risks of permitting China continued access to advanced semiconductors and chipmaking technologies.
The Chinese government has become very belligerent and aggressive in the South China Sea, and cutting access to advanced chips will reduce its ability to build more advanced missiles like the Dong-Feng 21 (DF-21) and the YJ-12.
China is also a source of chips that Russia desperately needs to build its own advanced missiles, so these rules would also prevent that possibility.
By blocking China’s access to advanced chips, the hope is that it will preclude hostilities from breaking out in Asia, and force an earlier and better conclusion of the Russian invasion of Ukraine.
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