The US government just imposed sweeping chip and chipmaking export restrictions that target Chinese military capabilities!
US Targets Chinese Military With New Chip Export Ban!
On Friday, October 7, 2022, the US government announced new regulations on computer chips and chipmaking technologies designed to target Chinese military capabilities.
The stated goal of these new export restrictions is to “block the People’s Liberation Army and China’s domestic surveillance apparatus from gaining access to advanced computing capabilities that require the use of advanced semiconductors.”
According to US officials, these rules target not only the sale and export of chips, but also the tools and software that might help the Chinese military in any way, including aiding the development of weapons of mass destruction.
Unlike earlier rules that target specific Chinese companies (like HUAWEI), the new rules have far greater reach, covering everything from chips made by AMD and NVIDIA, to complex and expensive hardware and software used to design and manufacture semiconductor chips.
These rules, some of which go into effect immediately, build on existing restrictions that were earlier applied to top chip toolmaking companies in the US, like KLA Corporation, Lam Research Corporation, and Applied Material Incorporated.
It’s not just advanced chips used for AI computing and national security or military applications that are being targeted.
The new rules are more generic, and forbid US companies from selling technologies to indigenous Chinese companies that will enable the production of:
- DRAM chips at 18 nm or below,
- NAND flash chips at 128 layers or above, and
- logic chips at 14 nm or below.
Even foreign companies operating China are somewhat affected. US companies will need to obtain a license to export more advanced equipment to them.
But in a concession to South Korea, the US government will spare SK Hynix and Samsung from these measures. US companies will be able to continue supplying their production facilities in China.
Many of the rules aim to block foreign companies from selling advanced chips or chipmaking technologies and tools to China. However, the US government will need to “lean” on those countries to introduce similar measures.
Most advanced chips are manufactured in South Korea and Taiwan. If they continue to export to China, they will allow China to bypass US restrictions.
Read more : Biden To Hit China With More Chip Restrictions!
Chinese Government Criticised US Chip Export Ban
On Saturday, the Chinese government criticised the new US chip export ban, calling it a violation of International economic and trade rules that will “isolate and backfire” on the US.
Out of the need to maintain its sci-tech hegemony, the U.S. abuses export control measures to maliciously block and suppress Chinese companies.
It will not only damage the legitimate rights and interests of Chinese companies, but also affect American companies’ interest.
– Mao Ning, Chinese Foreign Ministry spokesperson
Despite Mao’s assertions that US actions will not stop China’s progress, the new wide-ranging chip and chipmaking export ban will undoubtedly be detrimental to the Chinese semiconductor industry, and set back its attempts at indigenous production by many years.
On the other hand, this export ban will spur China to redouble its efforts to develop its own chipmaking capabilities, and possibly “strike back” by restricting exports of rare earths to US companies.
US Chip Export Rules Affecting Chinese Companies Summarised
Here is a summary of the new restrictions that take effect on Friday (October 7, 2022):
- Tools that are capable of producing logic chips made using fin field-effect transistors (FinFET) are blocked from sale to China.
- Tools capable of fabricating NAND flash storage chips with 128-layer technology or greater, and DRAM based on 18-nanometer half-pitch or less technology are blocked from sale to China.
- Servicing and maintenance of restricted tools are also banned, which would prevent keeping advanced equipment in good enough shape to keep producing quality chips at high volume.
- US citizens currently servicing or supporting tools on the restricted list must halt their activities by Wednesday, October 12.
- Export of items that China can use to make its own chip manufacturing tools, such as a photolithography light source and other specialised components are also blocked from sale to China.
The US Commerce Department also enacted these additional measures on Friday:
- 31 Chinese entities were added to the Unverified List, which consists of companies that the US government believes could divert technology that they purchase to restricted entities.
- The Commerce Department expanded the scope of controls for the 28 Chinese firms already on the US Entity List, including presumptively denying any licenses because of the risk they will divert technology to the Chinese military.
Then two weeks later, these restrictions will take effect on Friday, October 21, 2022:
- Using a new foreign direct product rule, the U.S. will block any chips that used in advanced computing and artificial intelligence applications.
- The foreign direct product rule can block chips made by non-US companies — including Chinese chip designers — if they use American technology or software.
- TSMC may be forced by this new rule to halt production on advanced AI or supercomputer chips designed by Chinese firms that are fabricated in Taiwan, unless it gets an exemption.
- A new foreign direct product rule will apply to components and chips destined for supercomputers in China.
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