US Imposes New Export Controls on China's Semiconductor Industry

US hits China's chip industry with new export controls

The US has introduced new export controls in an effort to curtail China's ability to create an advanced semiconductor industry and to slow its development of artificial intelligence with military applications. The restrictions on the export of key manufacturing tools will affect both US companies and foreign firms that use American technology in their chipmaking equipment. The US will also prevent the export of advanced high bandwidth memory (HBM), a critical component in AI chips, to China. US commerce secretary Gina Raimondo said the new controls, which follow two previous broad packages enacted in October 2022 and October 2023, were "groundbreaking and sweeping". "They're the strongest controls ever enacted by the US to degrade the People's Republic of China's ability to make the most advanced chips that they're using in their military modernisation," she said The commerce department will also add 140 Chinese groups to the "entity list" -- a blacklist that requires US and other companies to apply for export licences which are expected to be virtually impossible to obtain. The targets include chip manufacturers -- such as Semiconductor Manufacturing International Corporation and Huawei -- in addition to Chinese companies that produce the equipment to manufacture chips. Meghan Harris, an export control expert at Beacon Global Strategies, a consultancy, said hitting China's chipmaking equipment industry would target an area the Biden administration had underestimated. "Trying to impede China's advanced semiconductor industry without addressing their accelerating domestic toolmaking capabilities is like trying to prevent a fisherman from catching bigger fish simply by denying him bigger fishing poles. He'll get there in the end," said Harris. The rules restrict the export of 24 types of chipmaking tools that were not previously targeted. To make them more effective, the US will in many cases apply an extraterritorial measure called the foreign direct product rule [FDPR] that will hit non-US companies that have US parts in their tools, which is the overwhelming majority. One person familiar with the rules said the US had carved out an FDPR exemption for Japan and some European allies, including the Netherlands, after they agreed to apply their own export restrictions. South Korea has not yet secured an exemption, but could later. One US official said the FDPR would make it harder for US groups to circumvent existing controls by producing tools in other countries -- such as Singapore and Malaysia -- for export to China. In a recent report, Gregory Allen, an AI expert at CSIS, said the main American toolmakers -- Applied Materials, KLA and Lam Research -- had "doubled down" on expanding their non-US manufacturing. Some critics have privately questioned why the administration is not placing more Huawei chip production facilities on the entity list. Asked how many fabrication plants exist that are not on the list, a second US official would say only that the controls were focused on advanced chip production. People familiar with the situation said there had been an intense debate inside the administration over how to tackle Huawei. One person said some of the Huawei plants were still not operational, so it was unclear if they would be for advanced chips. But some officials had pushed for tougher controls on the Shenzhen-based company. In addition to compromises reached between different agencies, the US decided to take a less aggressive approach in some areas in order to get chip-related co-operation on restrictions from its allies. Questions have also been raised about why the administration did not add CXMT, a Chinese producer of HBM, to the entity list. Some inside the administration had pushed for this, but one person said the other restrictions would have some impact on its ability to produce HBM. Allen said there was a "bizarre contradiction" at the heart of the new controls. He said that, for example, the administration was significantly expanding the scope of FDPR to cover almost all chipmaking tools around the world, but on the other hand the controls would only cover some Huawei and SMIC shell companies but not others. "What is the point of blocking sales of HBM and AI chips to China while continuing to allow sales of equipment to CXMT, which is one of the most likely HBM producers in China?" he said.

Biden hits China with new export rules to curb its AI ambitions

The big picture: Tech pundits broadly agree that advanced chipmaking and AI applications will be pivotal in shaping the 21st-century economy. The US and its allies, along with China, are investing staggering amounts of resources into these fields. However, maintaining a competitive edge over China in these critical areas is becoming increasingly challenging, even with aggressive government intervention. This difficulty stems from the complexity of global supply chains and China's ability to rapidly identify alternative methods for acquiring the materials and tools needed to meet future demands. The US has announced a new set of sanctions designed to restrict China's access to critical Western technologies that could enhance its AI and military capabilities. Predictably, China's Ministry of Commerce accused the US of "abusing export controls" and is reportedly considering a ban on the export of materials such as germanium, gallium, antimony, graphite, and diamonds. These materials are essential for producing fiber optics, electronic components, and batteries, potentially disrupting supply chains for US industries. Although the primary aim is to cut off Chinese entities from advanced chipmaking tools, the new restrictions are expected to have ripple effects on some American companies and their international partners in the semiconductor industry. A key focus of the sanctions is limiting the export of high-bandwidth memory (HBM) products, which are vital for developing AI hardware solutions in data centers. For China, the sanctions pose a significant hurdle in its drive for technological self-sufficiency amid what experts describe as a "Chip Cold War." US Commerce Secretary Gina Raimondo emphasized the gravity of the measures, calling them "the strongest controls ever enacted by the US to degrade the People's Republic of China's ability to make the most advanced chips that they're using in their military modernization." Pictured: China's rapidly expanding chip industry The latest set of US export controls will add at least 140 Chinese organizations to the "Entity List," which now includes companies like Wingtech Technology and chip investment firm Wise Road Capital. Any US-based companies or international firms seeking to do business with entities on this blacklist must apply for export licenses, which are notoriously difficult to obtain. For the Biden administration, this marks the third major effort to curb Beijing's AI ambitions, coming just weeks before President-elect Donald Trump is set to be sworn into office. During his previous term, Trump also advocated for stricter export rules targeting companies like Huawei and SMIC while pushing for increased government funding to revitalize US semiconductor manufacturing. The new regulations expand the scope of export controls to include 24 additional types of chipmaking equipment that were not previously restricted. Moreover, the US will invoke the Foreign Direct Product Rule (FDPR), which affects nearly every non-US company utilizing US-made or US-designed components in their products. This indicates that the Biden administration may have previously underestimated China's ability to bypass US export controls and is now taking stronger measures to close those loopholes. However, the new rules could also pose challenges for US companies like Applied Materials and Lam Research, making it harder for them to grow their international manufacturing of chipmaking tools. An industry insider, speaking to the Financial Times, revealed that Japan and several European nations have secured exemptions from the FDPR by committing to implement their own export restrictions. South Korea is reportedly pursuing a similar agreement, given the significant investments by Samsung and SK Hynix in the production of high-bandwidth memory (HBM) products. That said, experts like Greg Allen from the Center for Strategic and International Studies and Dylan Patel of SemiAnalysis remain skeptical that the revised export controls will achieve their intended objectives. They argue that the Biden administration has designed an overly complex set of rules, riddled with potential loopholes and overly dependent on international cooperation to implement multilateral export controls effectively. Allen and Patel point out that the poor timing of each regulatory iteration has allowed Chinese companies to adapt and stay one step ahead, significantly diminishing the impact of these measures. For instance, a company like Huawei can easily create a network of subsidiaries or source materials and tools from entities not yet listed on the Entity List. By the time sanctions catch up, Huawei and similar companies have often already established fully operational facilities equipped with technology they technically shouldn't have been able to acquire. While the current export controls may have their flaws, it will now fall to the incoming Trump administration to explore more effective enforcement strategies. In the meantime, Chinese firms are expected to stockpile as many high-bandwidth memory chips as possible before the new regulations come into effect next month.

U.S. announces new export controls on China's chip industry

The United States on Monday launched its third crackdown in three years on China's semiconductor industry, curbing exports to 140 companies, including chip equipment maker Naura Technology Group, among other moves. The effort to hobble Beijing's chipmaking ambitions also hits Chinese chip toolmakers Piotech, ACM Research and SiCarrier Technology with new export restrictions as part of the package, which also takes aim at shipments of advanced memory chips and more chipmaking tools to China. The move is one of the Biden administration's last large-scale efforts to stymie China's ability to access and produce chips that can help advance artificial intelligence for military applications, or otherwise threaten U.S. national security. It comes just weeks before the swearing-in of President-elect Donald Trump, who is expected to retain many of Biden's tough-on-China measures. The package includes curbs on China-bound shipments of high-bandwidth memory chips, critical for high-end applications like AI training; new curbs on 24 additional chipmaking tools and three software tools; and new export curbs on chipmaking equipment made in countries such as Singapore and Malaysia. Commerce Secretary Gina Raimondo said the action aims to prevent "China from advancing its domestic semiconductor manufacturing system, which it will use to support its military modernization." Reuters first reported many companies involved and key details of the plan. The tool controls will most likely hurt Lam Research, KLA and Applied Materials, as well as non-U.S. companies like Dutch equipment maker ASM International. Chinese companies facing new restrictions include nearly two dozen semiconductor companies, two investment companies and over 100 chipmaking tool makers. The companies include Swaysure Technology Co., Si'En Qingdao and Shenzhen Pensun Technology Co., which work with China's Huawei Technologies. The telecommunications equipment leader has been hobbled by U.S. sanctions and is now at the center of China's advanced chip production and development. They will be added to the entity list, which bars U.S. suppliers from shipping to them without first receiving a special license. Asked about the U.S. curbs, Chinese foreign ministry spokesman Lin Jian said such behavior undermined the international economic trade order and disrupted global supply chains. China will take measures to safeguard the rights and interests of its firms, he added at a regular news briefing on Monday. China's commerce ministry described the U.S. restrictions as a clear example of "economic coercion" and "non-market practices," according to a statement published on its official website after the new curbs were announced. China has stepped up its drive to become self-sufficient in the semiconductor sector in recent years, as the U.S. and other countries have restricted exports of the advanced chips and the tools to make them. However, it remains years behind chip industry leaders like Nvidia in AI chips and chip equipment maker ASML in the Netherlands. The U.S. also is poised to place additional restrictions on Semiconductor Manufacturing International Co., China's largest contract chip manufacturer, which was placed on the Entity List in 2020 but with a policy that allowed billions of dollars' worth of licenses to ship goods to it to be granted. For the first time, the U.S. will add three companies that make investments in chips to the entity list. Chinese private equity firm Wise Road Capital, tech firm Wingtech Technology Co. and JAC Capital were added, the department said, because of their role "in aiding China's government's efforts to acquire entities with sensitive semiconductor manufacturing capability critical to the defense industrial bases of the United States and its allies with the objective of relocating these entities to China." Companies seeking licenses to ship to firms on the Entity List generally get denied. An aspect of the new package that addresses the foreign direct product rule could hurt some U.S. allies by limiting what their companies can ship to China. The new rule will expand U.S. powers to curb exports of chipmaking equipment by U.S., Japanese and Dutch manufacturers made in other parts of the world to certain chip plants in China. Equipment made in Israel, Malaysia, Singapore, South Korea and Taiwan is subject to the rule, while Japan and the Netherlands will be exempt. The expanded foreign direct product rule will apply to 16 companies on the entity list that are seen as the most important to China's most advanced chipmaking ambitions. The rule will also lower to zero the amount of U.S. content that determines when certain foreign items are subject to U.S. control. That will allow the U.S. to regulate any item shipped to China from overseas if it contains any U.S. chips. The new rules are being released after lengthy discussions with Japan and the Netherlands, which, along with the United States, dominate the production of advanced chipmaking equipment. The Dutch government said it will study the new restrictions, adding that "every country has its own considerations" on national security and export controls. ASML said on its website that it did not see a material impact on its business, adding that if the Dutch government makes a "similar security assessment," it could affect exports of some of its chip making tools. The latest rules are the third major package of chip-related export curbs on China adopted under the Biden administration. In October 2022, the United States published a sweeping set of controls on sale and manufacture of certain high-end chips that was considered to be the biggest shift in its tech policy toward China since the 1990s.

Latest US strike on China's chips hits semiconductor toolmakers

The package includes curbs on China-bound shipments of high bandwidth memory (HBM) chips, which are critical for high-end applications like AI training; new curbs on 24 additional chipmaking tools and three software tools; and new export restrictions on chipmaking equipment manufactured in countries including Singapore and Malaysia.The US will launch its third crackdown in three years on China's semiconductor industry on Monday, restricting exports to 140 companies including chip equipment maker Naura Technology Group, among other moves, according to two people familiar with the matter. The effort to hobble Beijing's chipmaking ambitions will also hit Chinese chip toolmakers Piotech and SiCarrier Technology with new export restrictions as part of the package, which also takes aim at shipments of advanced memory chips and more chipmaking tools to China. The move marks one of the Biden Administration's last large scale effort to stymy China's ability to access and produce chips that can help advance artificial intelligence for military applications or otherwise threaten U.S. national security. It comes just weeks before the swearing in of Republican former president Donald Trump, who is expected to keep in place many of Biden's tough-on-China measures. The package includes curbs on China-bound shipments of high bandwidth memory (HBM) chips, which are critical for high-end applications like AI training; new curbs on 24 additional chipmaking tools and three software tools; and new export restrictions on chipmaking equipment manufactured in countries including Singapore and Malaysia. The tool controls will likely hurt Lam Research, KLA and Applied Materials, as well as non-U.S. companies like Dutch equipment maker ASM International . Among Chinese companies facing new restrictions are nearly two dozen semiconductor companies, two investment companies and over 100 chipmaking tool makers, the sources said. U.S. lawmakers say some of the companies, including Swaysure Technology Co, Qingdao SiEn, and Shenzhen Pensun Technology Co, work with China's Huawei Technologies, the telecommunications equipment leader once hobbled by U.S. sanctions and now at the center of China's advanced chip production and development. They will be added to the entity list, which bars U.S. suppliers from shipping to them without first receiving a special license. China has stepped up its drive to become self-sufficient in the semiconductor sector in recent years, as the U.S. and other countries have restricted exports of the advanced chips and the tools to make them. However, it remains years behind chip industry leaders like Nvidia in AI chips and chip equipment maker ASML in the Netherlands. The U.S. also is poised to place additional restrictions on Semiconductor Manufacturing International, China's largest contract chip manufacturer, which was placed on the Entity List in 2020 but with a policy that allowed billions of dollars worth of licenses to ship goods to it to be granted. For the first time, the U.S. will add two companies that make investments in chips to the entity list. Chinese private equity firm Wise Road Capital and tech firm Wingtech Technology Co will be added. Companies seeking licenses to ship to firms on the Entity List generally get denied. Dutch and Japanese exempted An aspect of the new package that addresses the foreign direct product rule could hurt some U.S. allies by limiting what their companies can ship to China. The new rule will expand U.S. powers to curb exports of chipmaking equipment by U.S., Japanese, and Dutch manufacturers made in other parts of the world to certain chip plants in China. Equipment made in Malaysia, Singapore, Israel, Taiwan and South Korea is subject to the rule while the Netherlands and Japan will be exempt. The expanded foreign direct product rule will apply to 16 companies on the entity list that are seen as the most important to China's most advanced chipmaking ambitions. The rule will also lower to zero the amount of U.S. content that determines when certain foreign items are subject to U.S. control. That will allow the U.S. to regulate any item shipped to China from overseas if it contains any U.S. chips. The new rules are being released after lengthy discussions with Japan and the Netherlands, which, along with the U.S., dominate the production of advanced chipmaking equipment. The U.S. plans to exempt countries that put in place similar controls, the people said. Another rule in the package restricts memory used in AI chips that correspond with what is known as "HBM 2" and higher, technology made by South Korea's Samsung and SK Hynix and U.S.-based Micron. Industry sources only expect Samsung Electronics to be impacted. The latest rules are the third major package of chip-related export restrictions on China implemented under the Biden administration. In October 2022, the U.S. published a sweeping set of controls to curb the sale and manufacture of certain high-end chips which were considered to be the biggest shift in US tech policy toward China since the 1990s.

Latest US clampdown on China's chips hits semiconductor toolmakers

/getttyimagesbank The United States on Monday launched its third crackdown in three years on China's semiconductor industry, curbing exports to 140 companies, including chip equipment maker Naura Technology Group, among other moves. The effort to hobble Beijing's chipmaking ambitions also hits Chinese chip toolmakers Piotech, ACM Research and SiCarrier Technology with new export restrictions as part of the package, which also takes aim at shipments of advanced memory chips and more chipmaking tools to China. The move is one of the Biden administration's last large-scale efforts to stymie China's ability to access and produce chips that can help advance artificial intelligence for military applications, or otherwise threaten U.S. national security. It comes just weeks before the swearing-in of Republican President-elect Donald Trump, who is expected to retain many of Biden's tough-on-China measures. The package includes curbs on China-bound shipments of high bandwidth memory chips, critical for high-end applications like AI training; new curbs on 24 additional chipmaking tools and three software tools; and new export curbs on chipmaking equipment made in countries such as Singapore and Malaysia. Commerce Secretary Gina Raimondo said the action aims to prevent "China from advancing its domestic semiconductor manufacturing system, which it will use to support its military modernization." Reuters first reported many companies involved and key details of the plan. The tool controls will likely hurt Lam Research, KLA and Applied Materials, as well as non-U.S. companies like Dutch equipment maker ASM International . Chinese companies facing new restrictions include nearly two dozen semiconductor companies, two investment companies and over 100 chipmaking tool makers. The companies include Swaysure Technology Co, Si'En Qingdao, and Shenzhen Pensun Technology Co, which work with China's Huawei Technologies. The telecommunications equipment leader has been hobbled by U.S. sanctions and is now at the center of China's advanced chip production and development. They will be added to the entity list, which bars U.S. suppliers from shipping to them without first receiving a special license. Asked about the U.S. curbs, Chinese foreign ministry spokesman Lin Jian said such behavior undermined the international economic trade order and disrupted global supply chains. China will take measures to safeguard the rights and interests of its firms, he added at a regular press briefing on Monday. China's commerce ministry described the U.S. restrictions as a clear example of "economic coercion" and "non-market practices," according to a statement published on its official website after the new curbs were announced. US unveils new package of chip export controls against China 2024-12-03 07:46 | Foreign Affairs China has stepped up its drive to become self-sufficient in the semiconductor sector in recent years, as the U.S. and other countries have restricted exports of the advanced chips and the tools to make them. However, it remains years behind chip industry leaders like Nvidia in AI chips and chip equipment maker ASML in the Netherlands. The U.S. also is poised to place additional restrictions on Semiconductor Manufacturing International Co., China's largest contract chip manufacturer, which was placed on the Entity List in 2020 but with a policy that allowed billions of dollars worth of licenses to ship goods to it to be granted. For the first time, the U.S. will add three companies that make investments in chips to the entity list. Chinese private equity firm Wise Road Capital, tech firm Wingtech Technology Co and JAC Capital were added, the department said, because of their role "in aiding China's government's efforts to acquire entities with sensitive semiconductor manufacturing capability critical to the defense industrial bases of the United States and its allies with the objective of relocating these entities to China." Companies seeking licenses to ship to firms on the Entity List generally get denied. U.S. President Joe Biden holds a wafer of chips as he tours the Intel Ocotillo Campus in Chandler, Ariz., March 20. AFP-Yonhap Dutch and Japaneses exempted An aspect of the new package that addresses the foreign direct product rule could hurt some U.S. allies by limiting what their companies can ship to China. The new rule will expand U.S. powers to curb exports of chipmaking equipment by U.S., Japanese, and Dutch manufacturers made in other parts of the world to certain chip plants in China. Equipment made in Israel, Malaysia, Singapore, South Korea and Taiwan is subject to the rule while Japan and the Netherlands will be exempt. The expanded foreign direct product rule will apply to 16 companies on the entity list that are seen as the most important to China's most advanced chipmaking ambitions. The rule will also lower to zero the amount of U.S. content that determines when certain foreign items are subject to U.S. control. That will allow the U.S. to regulate any item shipped to China from overseas if it contains any U.S. chips. The new rules are being released after lengthy discussions with Japan and the Netherlands, which, along with the United States, dominate the production of advanced chipmaking equipment. The Dutch government said it will study the new restrictions, adding that "every country has its own considerations" on national security and export controls. ASML said on its website that it did not see a material impact on its business, adding that if the Dutch government makes a "similar security assessment," it could affect exports of some of its chip making tools. The United States plans to exempt countries that adopt similar controls, sources told Reuters. Another rule in the package restricts memory used in AI chips that correspond with what is known as "HBM 2" and higher, technology made by South Korea's Samsung and SK Hynix and U.S.-based Micron. Industry sources expect only Samsung Electronics to be affected. Samsung generates about 20% of its HBM chip sales from China, a person with knowledge of the matter said. The latest rules are the third major package of chip-related export curbs on China adopted under the Biden administration. In October 2022, the United States published a sweeping set of controls on sale and manufacture of certain high-end chips that was considered to be the biggest shift in its tech policy toward China since the 1990s. (Reuters)

The US Just Made It Way Harder for China to Build Its Own AI Chips

The US Department of Commerce introduced a sweeping package of export controls on Monday designed to weaken China's domestic semiconductor ecosystem and undermine the country's ability to manufacture advanced chips locally. The new regulations prevent China from accessing 24 types of chip manufacturing equipment and three software programs, and place restrictions on the sale to China of high-bandwidth memory, or HBM, an advanced kind of 3D-stacked computer memory component that is often used in customized AI chips. "They're the strongest controls ever enacted by the US to degrade the PRC's ability to make the most advanced chips that they're using in their military modernization," Commerce Secretary Gina Raimondo said on a call with reporters. The measures are likely to enrage Beijing, which has given tens of billions of dollars worth of subsidies and tax breaks to semiconductor firms in the hopes of building out its own chips sector. Over the past decade, the United States has grown increasingly concerned that China could use cutting-edge computer chips to build AI-powered military weapons or other technology that threatens the US and its allies. To address the issue, the Biden administration has concentrated its efforts on preventing China from acquiring high-end semiconductors made by companies like Nvidia and Taiwan Semiconductor Manufacturing Company Limited (TSMC). But China proved it was capable of manufacturing high-end chips on its own, so the US shifted its attention to going after the components and equipment that Chinese companies like Huawei still rely on to produce their homegrown silicon. The measures announced today are the most far-reaching part of that strategy so far. WIRED previously reported the Biden administration was working on the provisions, which are the result of months of negotiations with US allies and industry partners. In response to the anticipated measures, Mao Ning, a spokesperson for China's foreign ministry, accused the United States last week of "overstretching the concept of national security," and using export controls to suppress China. "Such moves seriously violate the laws of market economy and the principles of fair competition, disrupt international economic and trade order and the stability of global industrial and supply chains," Mao said at a regularly scheduled press conference. One of the most significant changes introduced is an update to the Foreign Direct Product Rule (FDP), a relatively obscure trade regulation that covers goods made in other countries with US technology, software, or components. Previously, only foreign-made chip manufacturing equipment and tools with more than 25 percent of US components were subject to FDP. That threshold is now being abolished, meaning that if any American technology was used to create, say, a lithography tool in the Netherlands or a memory component in South Korea, it will be subject to US export controls.

US Expands China Restrictions, Banning AI Memory Exports and 140 Companies

The US is adding more restrictions on tech exports to China, banning 140 companies as well as the shipment of memory and chip manufacturing equipment to the country, according to reports from multiple news outlets and the US Bureau of Industry and Security. This latest crackdown is expected to take effect on Monday. Commerce Department Secretary Gina Raimondo reportedly called the new rules "groundbreaking and sweeping" in a statement. The Bureau of Industry and Security said the expanded tech ban "will restrict the PRC's ability to produce technologies key to its military modernization or repression of human rights." One of the blocked firms is the Naura Technology Group, which is partially owned by the Chinese state. Chinese chip firms Piotech and SiCarrier are also being restricted under the new rules. Wise Road Capital and Wingtech Technology, two firms that invest in the chip industry, are also being restricted, as well as nearly two dozen semiconductor firms and over 100 chip production tool manufacturers. In recent months, US-sanctioned Chinese tech giant Huawei has been accused of using shell companies to skirt the rules to obtain advanced chips from the likes of Taiwan Semiconductor Manufacturing Corp (TSMC). Some of the now-restricted firms -- like Swaysure Technology, Qingdao SiEn, and Shenzhen Pensun Technology -- reportedly do business with Huawei and are therefore now on the US ban list. This means US firms or those that use US chip-making equipment can't ship to them. But Chinese and US firms aren't the only ones impacted by the rules. Singapore, South Korea, Taiwan, Israel, and Malaysia are being barred from sending any chip-making equipment to China. Japan and the Netherlands are reportedly exempt from these rules because they have negotiated terms with the US. High-bandwidth memory (HBM) exports are also part of the expanded export ban. HBM is a type of computer interface made by Samsung, SK Hynix, and Micron. It holds RAM and can be more powerful than DDR4 and GDDR5 RAM and can be used in AI computing to run generative AI models. HBM can no longer be shipped to China without the Commerce Department's permission. The Biden administration first established Chinese tech export restrictions in 2022, and has added to them a few times in part to try to close existing loopholes. Analysts suspect that because these latest rules have taken months to come into effect, banned firms may have already stockpiled tech to get around the restrictions. Previous reports of a chip-smuggling network suggest at least some of the rules may be difficult to enforce. Biden's Chips and Science Act has since awarded or earmarked billions of dollars to firms like Samsung, Intel, Micron, TSMC, and others to boost US chip production.

U.S. imposes new semiconductor export regulations to China

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) on Monday announced updated export controls aimed at restricting China's access to advanced semiconductor technologies. This move targets China's ability to produce cutting-edge chips, essential for advanced weaponry, artificial intelligence (AI), and military modernization. These measures build on previous efforts to curb China's technological advancements and reduce national security risks. The updated regulations introduce controls on: The BIS acknowledged that these restrictions aim to "impair China's ability to indigenize production" of critical technologies. Commerce Secretary Gina Raimondo described the rules as "groundbreaking and sweeping." The measures also address potential loopholes, including the stockpiling of restricted equipment during delays in the rule's release. These rules are designed to curb China's ability to build a self-sufficient semiconductor industry, a key goal for Beijing. Chinese entities had previously found loopholes in earlier restrictions, stockpiling chips and tools before the regulations were finalized. The new controls, however, aim to close these gaps. While the restrictions may slow China's semiconductor ambitions, experts note potential loopholes, such as the availability of older HBM chips. Gregory Allen from the Wadhwani AI Center highlighted that not all facilities linked to HUAWEI were blacklisted, leaving room for maneuvering. Chip toolmakers, including Applied Materials, ASML, Lam Research, and KLA, have ramped up lobbying efforts to shape the scope of these restrictions. Applied Materials reported an 86% rise in revenue from Chinese exports, amounting to $7.9 billion in the first nine months of the year, which accounts for 40% of its total revenue, according to The Wall Street Journal. Countries like South Korea, Japan, and the Netherlands have supported U.S. efforts by imposing their own restrictions. This collaboration underscores a unified stance against China's access to advanced chip technology. However, China's Foreign Ministry criticized the U.S. for "abusing export control measures" and undermining free-market principles. BIS's actions align with a broader strategy to maintain a technological edge over China while safeguarding national security. The focus remains on slowing China's progress in AI and military tech development. The U.S. also seeks to prevent the use of AI for military operations and human rights violations, such as surveillance of minorities and political dissidents. These export controls, marking the fourth attempt in three years by the Biden administration, highlight the U.S. 'small yard, high fence' approach -- limiting access to critical technologies while maintaining a tight grip on key innovations The U.S. strategy underscores a dual objective: slowing China's AI development and disrupting its semiconductor ecosystem. The BIS emphasized that these actions aim to protect national security while addressing technological advancements with potential military uses. Speaking about the new measures, U.S. Secretary of Commerce Gina Raimondo said,

Biden targets China's chip industry with wider trade bans

The Biden administration on Monday announced broader restrictions on advanced technology that can be sent to China, in an effort to prevent the country from developing its own advanced chips for military equipment and artificial intelligence. The restrictions will prohibit the sales of certain types of chips and machinery to China, and will add more than 100 Chinese companies to a restricted trade list. The move marks the Biden administration's third major update over the past three years to a set of rules that have tried to cut China off from the world's most advanced technology. The rules are also likely to be the administration's last on Chinese technology before President-elect Donald Trump's inauguration next month, aiming to cement the Biden administration's legacy in slowing down a rival country's technological progress. Commerce Secretary Gina Raimondo told reporters in a call Sunday that the move represented "the strongest controls ever enacted by the U.S. to degrade the PRC's ability to make the most advanced chips that they're using in their military modernization," referring to the People's Republic of China. She said the government had worked closely with experts, industry and allied countries to ensure that "our actions protect national security while minimizing unintended commercial consequences." National security officials have said that China's ability to acquire and make advanced computer chips poses a threat to the United States. The chips are crucial for powering AI and supercomputers that can be used to launch cyberattacks, design new weapons, erect surveillance systems and increase the military's ability to respond accurately and rapidly to foreign attacks. In October 2022, the Biden administration issued its first sweeping restrictions on China, by banning sales of advanced AI chips and certain chipmaking machinery to the country. In October 2023, the Biden administration built on those rules to capture more types of AI chips. The rules issued Monday added 140 Chinese companies, many of which make the tools and machinery necessary for manufacturing chips, to a restricted trade list called the entity list -- one of the largest batches of additions so far. The rules also set up restrictions on shipping to China certain advanced memory chips, as well as two dozen types of semiconductor equipment and several software tools used to develop chips. Those rules will go into effect Dec. 31. The department also added new requirements for companies, as they vet certain Chinese semiconductor factories, to ensure that those facilities are not diverting their technology to firms on the list. The restrictions on shipping certain manufacturing equipment to China will apply globally, partly to address incidents in which U.S. companies might use offshore production to skirt any export ban, a senior administration official said. However, certain countries that have the capability to impose their own comparable rules will be exempted, essentially creating a pathway for allies to impose their own controls, the official said. Japan and the Netherlands, which are home to major companies that make chip-manufacturing equipment, agreed several months ago to follow U.S. rules by issuing their own restrictions on some exports. When those rules will go into effect is not clear, however, raising concerns that companies in those countries could ship more equipment to China in the coming months. Some officials and analysts have criticized the rules, saying that they were shaped by lobbying from chip companies, and that they contain exceptions favored by industry. For example, the administration could have gone after major Chinese chipmakers more aggressively, the critics say. U.S. equipment makers insisted that unilateral controls were hurting their performance, and that any restrictions must also apply to competitors in Japan and the Netherlands. But the effort to get allies onboard ultimately took more than a year, allowing China to stockpile equipment in the interim, some critics said. It is still unclear if or how the Chinese government will respond. In recent years, China has expanded its own export-control laws, giving it more ability to halt exports of products such as rare earth minerals, and has created an "unreliable entity list" to penalize companies that undermine national interests. In a briefing last week, Mao Ning, the spokesperson of China's Foreign Ministry, said the country "firmly opposed" what she called the "abuse of export-control measures and malicious blockade and suppression of China." China's efforts to develop its own independent technology supply chains, along with the export controls that the United States has issued in recent years, are increasingly splitting the world into two spheres when it comes to advanced technologies. Global companies have been struggling to straddle that divide. For many companies, China remains an essential economic partner, as home to most of the world's electronics factories and as a huge consumer market in its own right. But China is also now increasingly recognized as the United States' biggest rival, the only other government with the ability and intent to challenge the United States on the world stage. China has unabashedly deployed foreign technology and leaned on private companies to strengthen the military, a situation that U.S. officials now see as untenable.

Biden targets China's chip industry with wider trade bans

WASHINGTON -- The Biden administration on Monday announced broader restrictions on advanced technology that can be sent to China, in an effort to prevent the country from developing its own advanced chips for military equipment and artificial intelligence. The restrictions will prohibit the sales of certain types of chips and machinery to China, and will add more than 100 Chinese companies to a restricted trade list. The move marks the Biden administration's third major update over the past three years to a set of rules that have tried to cut China off from the world's most advanced technology. The rules are also likely to be the administration's last on Chinese technology before President-elect Donald Trump's inauguration next month, aiming to cement the Biden administration's legacy in slowing down a rival country's technological progress. Commerce Secretary Gina Raimondo told reporters in a call Sunday that the move represented "the strongest controls ever enacted by the U.S. to degrade the PRC's ability to make the most advanced chips that they're using in their military modernization," referring to the People's Republic of China. She said the government had worked closely with experts, industry and allied countries to ensure that "our actions protect national security while minimizing unintended commercial consequences." National security officials have said that China's ability to acquire and make advanced computer chips poses a threat to the United States. The chips are crucial for powering AI and supercomputers that can be used to launch cyberattacks, design new weapons, erect surveillance systems and increase the military's ability to respond accurately and rapidly to foreign attacks. In October 2022, the Biden administration issued its first sweeping restrictions on China, by banning sales of advanced AI chips and certain chipmaking machinery to the country. In October 2023, the Biden administration built on those rules to capture more types of AI chips. The rules issued Monday added 140 Chinese companies, many of which make the tools and machinery necessary for manufacturing chips, to a restricted trade list called the entity list -- one of the largest batches of additions so far. The rules also set up restrictions on shipping to China certain advanced memory chips, as well as two dozen types of semiconductor equipment and several software tools used to develop chips. Those rules will go into effect Dec. 31. The department also added new requirements for companies, as they vet certain Chinese semiconductor factories, to ensure that those facilities are not diverting their technology to firms on the list. The restrictions on shipping certain manufacturing equipment to China will apply globally, partly to address incidents in which U.S. companies might use offshore production to skirt any export ban, a senior administration official said. However, certain countries that have the capability to impose their own comparable rules will be exempted, essentially creating a pathway for allies to impose their own controls, the official said. Japan and the Netherlands, which are home to major companies that make chip-manufacturing equipment, agreed several months ago to follow U.S. rules by issuing their own restrictions on some exports. When those rules will go into effect is not clear, however, raising concerns that companies in those countries could ship more equipment to China in the coming months. Some officials and analysts have criticized the rules, saying that they were shaped by lobbying from chip companies, and that they contain exceptions favored by industry. For example, the administration could have gone after major Chinese chipmakers more aggressively, the critics say. U.S. equipment makers insisted that unilateral controls were hurting their performance, and that any restrictions must also apply to competitors in Japan and the Netherlands. But the effort to get allies onboard ultimately took more than a year, allowing China to stockpile equipment in the interim, some critics said. It is still unclear if or how the Chinese government will respond. In recent years, China has expanded its own export-control laws, giving it more ability to halt exports of products such as rare earth minerals, and has created an "unreliable entity list" to penalize companies that undermine national interests. In a briefing last week, Mao Ning, the spokesperson of China's Foreign Ministry, said the country "firmly opposed" what she called the "abuse of export-control measures and malicious blockade and suppression of China." China's efforts to develop its own independent technology supply chains, along with the export controls that the United States has issued in recent years, are increasingly splitting the world into two spheres when it comes to advanced technologies. Global companies have been struggling to straddle that divide. For many companies, China remains an essential economic partner, as home to most of the world's electronics factories and as a huge consumer market in its own right. But China is also now increasingly recognized as the United States' biggest rival, the only other government with the ability and intent to challenge the United States on the world stage. China has unabashedly deployed foreign technology and leaned on private companies to strengthen the military, a situation that U.S. officials now see as untenable.

US unveils fresh export curbs targeting China's chip sector

Washington (AFP) - The United States announced new export restrictions Monday taking aim at China's ability to make advanced semiconductors -- used in weapon systems and artificial intelligence -- as competition deepens between the world's two biggest economies. "The United States has taken significant steps to protect our technology from being used by our adversaries in ways that threaten our national security," said National Security Advisor Jake Sullivan in a statement. He added that Washington will keep working with allies and partners "to proactively and aggressively safeguard our world-leading technologies and know-how so they aren't used to undermine our national security." The moves step up existing US efforts to tighten curbs on exports of state-of-the-art AI chips to China. The announcement comes weeks before President-elect Donald Trump returns to the White House, where he is expected to further Washington's hawkish stance on China. The latest rules include a restriction of exports to 140 companies, including Chinese chip firms Piotech and SiCarrier Technology. They also impact Naura Technology Group, which makes chip production equipment, according to the Commerce Department. The new rules also include controls on two dozen types of chipmaking equipment and three kinds of software tools for developing or producing semiconductors. "We are constantly talking to our allies and partners as well as reassessing and updating our controls," noted Under Secretary of Commerce for industry and security Alan Estevez. The efforts further a policy beginning under Trump's first administration, to hold back Beijing's ability to gain ground and become a leading tech economy. On Monday, Commerce Secretary Gina Raimondo stressed that President Joe Biden's government has been especially tough in "strategically addressing China's military modernization through export controls." "The semiconductor manufacturing equipment controlled by today's rules is needed to produce advanced-node integrated circuits, which are necessary for advanced weapon systems and advanced AI used in military applications," the Commerce Department said. It maintained that this is in line with Washington's "small yard, high fence" strategy -- an approach that Chinese President Xi Jinping last month urged against. The latest actions are aimed at slowing China's development of advanced AI that could "change the future of warfare," and impairing China's development of its own semiconductor ecosystem, noted the Commerce Department. The entity list that the 140 companies were added to restricts US suppliers from exporting to them without added permission. Calls to further close the semiconductor supply chain have grown since the world became increasingly aware of the powers of AI, with the launch of ChatGPT.

Latest US clampdown on China's chips hits semiconductor toolmakers

STORY: The U.S. launched yet another crackdown on China's semiconductor industry on Monday (Dec 2). Its the third such move in three years, and curbs exports to 140 companies. Those targeted include chip equipment maker Naura Technology Group, as well as other Chinese market leaders. The export restrictions also take aim at shipments of advanced memory chips and more chipmaking tools to China. The move is one of the Biden administration's last large-scale efforts to weaken China's ability to access and produce chips. It comes just weeks before the swearing-in of Republican President-elect Donald Trump. He is expected to retain many of Biden's tough-on-China measures. Washington believes Beijing could use chips to advance AI for military applications, and threaten U.S. national security. The latest package includes curbs on China-bound shipments of high bandwidth memory chips, which are critical for high-end applications like AI training. Chinese companies facing new restrictions include nearly two dozen semiconductor companies. Two investment companies and over 100 chipmaking tool makers also face being hit. Some of the impacted firms work with China's Huawei Technologies. The tech giant has faced U.S. sanctions for years, and is now at the center of China's advanced chip production and development. Beijing argued the U.S. move undermined the international economic trade order and disrupted global supply chains. It further said China will take measures to safeguard the rights and interests of its firms. On Tuesday, Beijing responded with export restrictions of its own. It said it would ban the export of "dual-use items" related to gallium, germanium, antimony and superhard materials to the U.S. with immediate effect China has stepped up its drive to become self-sufficient in the semiconductor sector in recent years. But it is still well behind chip industry leaders like Nvidia in AI chips and chip equipment maker ASML in the Netherlands.

Chip war ramps up with new US semiconductor restrictions on China

Biden administration broadens limits on Chinese access to advanced microchip technology, with Donald Trump expected to go even further The US has announced new export restrictions targeting China's ability to make advanced semiconductors, drawing swift condemnation from Beijing. Washington is expanding efforts to curb exports of state-of-the-art chips to China that can be used in advanced weapons systems and in artificial intelligence. The announcement on Monday came a few weeks before Donald Trump returns as president, where he is expected to bolster Washington's hawkish stance on China. On Monday the commerce secretary, Gina Raimondo, said Joe Biden's presidency had been especially tough in "strategically addressing China's military modernisation through export controls". Biden's national security adviser, Jake Sullivan, said: "The United States has taken significant steps to protect our technology from being used by our adversaries in ways that threaten our national security." Washington would keep working with allies and partners "to proactively and aggressively safeguard our world-leading technologies and knowhow so they aren't used to undermine our national security". Beijing vowed on Monday to defend its interests, with a Chinese commerce ministry spokesperson saying the US "abuses export control measures" and has "hindered normal economic and trade exchanges". The latest US rules include a restriction of sales to 140 companies, including Chinese chip firms Piotech and SiCarrier, without additional permission. They also impact Naura Technology Group, which makes chip production equipment, according to the commerce department. Others include entities in Japan, South Korea and Singapore. The new US rules also include controls on two dozen types of chip-making equipment and three kinds of software tools for developing or producing semiconductors. "We are constantly talking to our allies and partners as well as reassessing and updating our controls," said Alan Estevez, the undersecretary of commerce for industry and security. The Netherlands-based computer chip equipment maker ASML - which is the only manufacturer of the most cutting edge chip-making machines - said it did not expect the new US restrictions to affect its most recent financial guidance. ASML said the latest US restrictions would affect its export of deep ultraviolet lithography (DUV) systems to some chip-making plants in China, if enforced by the Dutch government. ASML is the only maker of extreme ultraviolet lithography machines (EUV) that produce the most advanced chips. Because of existing government restrictions around the use of US technology, it already cannot sell EUV machines to China. The Dutch government said separately on Monday that it shared US security concerns on the export of advanced semiconductor making tools, and was studying the latest US rules. The US commerce department said the fresh restrictions are meant to slow China's development of advanced AI that could "change the future of warfare", and impair China's development of its own semiconductor ecosystem. The agency maintained that this is in line with Washington's "small yard, high fence" policy, which targets restrictions strategically - an approach that the Chinese president, Xi Jinping, criticised last month. Calls to further close the semiconductor supply chain have grown since the world became increasingly aware of the powers of AI, with the launch of ChatGPT. Thibault Denamiel, a fellow at the Center for Strategic and International Studies, told AFP that the latest actions confirm "the trajectory of US policy rather than significantly stepping up control efforts". "The significance of the additions is lessened given proposals from the incoming Trump administration," he added, noting the president-elect has vowed drastic actions that dwarf these latest restrictions on chip technologies.

US strengthens chip curbs on China By Investing.com

Investing.com -- The Biden administration has announced stricter measures to limit China's access to key chipmaking components and AI technologies, Bloomberg News reported Monday, intensifying efforts to curtail Beijing's technological advancements. The new rules from the Department of Commerce include tighter restrictions on the sale of high-bandwidth memory (HBM) chips and chipmaking equipment, even for items manufactured by US companies abroad. Moreover, 140 Chinese entities have been added to a blacklist for allegedly advancing Beijing's technological objectives, though the department's initial statement did not identify them. Bloomberg previously reported that these regulations are less severe than earlier drafts, which helped trigger a rally among global semiconductor suppliers, including Tokyo Electron Ltd. (TYO:8035) in Asia and ASML Holding (AS:ASML) in Europe. The administration's aim is to slow China's ability to develop advanced semiconductors and AI systems, which could bolster its military capabilities. The latest sanctions and updated Entity List will be detailed in full later on Monday, the report said, citing a US official source. The US plans to "restrict the PRC's ability to produce technologies key to its military modernization or repression of human rights," the Bureau of Industry and Security said in a statement. It also noted the inclusion of "semiconductor fabs, tool companies, and investment companies" on the Entity List for their role in advancing China's chip production goals. Negotiations on these restrictions involved extensive consultations with foreign governments over the past year. Major semiconductor companies, including US firms Lam Research (NASDAQ:LRCX), Applied Materials (NASDAQ:AMAT), and KLA Corporation (NASDAQ:KLAC), along with competitors Tokyo Electron and ASML, engaged in lobbying efforts to balance market access with security concerns. According to Bloomberg, the rules target two dozen types of manufacturing equipment and three software tools, with certain exemptions for countries capable of implementing similar controls, such as Japan and the Netherlands. While those nations have not publicly committed to matching these measures, the US is encouraging them to enact comparable policies. A key aspect of the rules is the application of the foreign direct product rule (FDPR), which allows the US to regulate goods made abroad using any US technology. This provision seeks to prevent US toolmakers from bypassing trade restrictions by shifting production overseas. A report from the Center for Strategic and International Studies highlighted that US firms have increased exports to China from non-US locations since 2016, with notable growth since 2019. "This action is the culmination of the Biden-Harris Administration's targeted approach, in concert with our allies and partners, to impair the PRC's ability to indigenize the production of advanced technologies that pose a risk to our national security," said Secretary of Commerce Gina Raimondo. "No Administration has been tougher in strategically addressing China's military modernization through export controls." The latest measures also include restrictions on HBM chips, which are crucial for AI applications. The rules cover HBM2 and newer chips and apply to US and foreign firms through FDPR.

Biden Targets China's Chip Industry With Wider Trade Bans

Want to stay updated on what's happening in China? Sign up for Your Places: Global Update, and we'll send our latest coverage to your inbox. The Biden administration announced on Monday broader restrictions on advanced technology that can be sent to China, in an effort to prevent the country from developing its own advanced chips for military equipment and artificial intelligence. The restrictions will prohibit the sales of certain types of chips and machinery to China, and will add more than 100 Chinese companies to a restricted trade list. The move marks the Biden administration's third major update over the past three years to a set of rules that have tried to cut China off from the world's most advanced technology. The rules are also likely to be the administration's last on Chinese technology before President-elect Donald J. Trump's inauguration next month, aiming to cement the Biden administration's legacy in slowing down a rival country's technological progress. Commerce Secretary Gina Raimondo told reporters in a call on Sunday that the move represented "the strongest controls ever enacted by the U.S. to degrade the P.R.C.'s ability to make the most advanced chips that they're using in their military modernization," referring to the People's Republic of China. She said the government had worked closely with experts, industry and allied countries to ensure that "our actions protect national security while minimizing unintended commercial consequences." National security officials have said that China's ability to acquire and make advanced computer chips poses a threat to the United States. The chips are crucial for powering artificial intelligence and supercomputers that can be used to launch cyberattacks, design new weapons, erect surveillance systems and increase the military's ability to respond accurately and rapidly to foreign attacks. In October 2022, the Biden administration issued its first sweeping restrictions on China, by banning sales of advanced A.I. chips and certain chip-making machinery to the country. In October 2023, the Biden administration built on those rules to capture more types of A.I. chips. The rules issued on Monday added 140 Chinese companies, many of which make the tools and machinery necessary for manufacturing chips, to a restricted trade list called the entity list -- one of the largest batches of additions so far. The rules also set up restrictions on shipping to China certain advanced memory chips, as well as two dozen types of semiconductor equipment and several software tools used to develop chips. Those rules will go into effect on December 31. The department also added new requirements for companies, as they vet certain Chinese semiconductor factories, to ensure that those facilities are not diverting their technology to firms on the list. The restrictions on shipping certain manufacturing equipment to China will apply globally, partly to address incidents in which U.S. companies might use offshore production to skirt any export ban, a senior administration official said. However, certain countries that have the capability to impose their own comparable rules will be exempted, essentially creating a pathway for allies to impose their own controls, the official said. Japan and the Netherlands, which are home to major companies that make chip manufacturing equipment, agreed several months ago to follow U.S. rules by issuing their own restrictions on some exports. When those rules will go into effect is not clear, however, raising concerns that companies in those countries could ship more equipment to China in the coming months. Some officials and analysts have criticized the rules, saying that they were shaped by lobbying from chip companies, and that they contain exceptions favored by industry. For example, the administration could have gone after major Chinese chipmakers more aggressively, the critics say. U.S. equipment makers insisted that unilateral controls were hurting their performance, and that any restrictions must also apply to competitors in Japan and the Netherlands. But the effort to get allies onboard ultimately took more than a year, allowing China to stockpile equipment in the interim, some critics said. It is still unclear if or how the Chinese government will respond. In recent years, China has expanded its own export-control laws, giving it more ability to halt exports of products like rare earth minerals, and has created an "unreliable entity list" to penalize companies that undermine national interests. In a briefing last week, Mao Ning, the spokeswoman of China's Foreign Ministry, said that the country "firmly opposed" what she called the "abuse of export-control measures and malicious blockade and suppression of China." China's efforts to develop its own independent technology supply chains, along with the export controls that the United States has issued in recent years, are increasingly splitting the world into two spheres when it comes to advanced technologies. Global companies have been struggling to straddle that divide. For many companies, China remains an essential economic partner, as home to most of the world's electronics factories and as a huge consumer market in its own right. But China is also now increasingly recognized as America's biggest rival, the only other government with the ability and intent to challenge the United States on the world stage. China has unabashedly deployed foreign technology and leaned on private companies to strengthen the military, a situation that U.S. officials now see as untenable. Amy Chang Chien contributed reporting.

Biden administration hits out at China's chip industry with export controls - SiliconANGLE

Biden administration hits out at China's chip industry with export controls The Biden administration today announced new restrictions on advanced chip technology that can be exported to China in a further effort to curb the country's ambitions in artificial intelligence and the development of high-end military technology. According to the Commerce Department's Bureau of Industry and Security, the new export controls will see over 100 Chinese chipmaking tool manufacturers placed on a restricted trade list, which will prohibit U.S. firms from sending them equipment without permission from the U.S. government. This becomes the third major move by the Biden administration to thwart China's chip industry with restrictions. It will very likely be the last one, although, after President-elect Donald J. Trump's inauguration next month, the Trump administration will likely carry on this hardline approach to China and its advanced technologies. Commerce Secretary Gina Raimondo said these are "the strongest controls ever enacted by the U.S. to degrade the P.R.C.'s ability to make the most advanced chips that they're using in their military modernization." After working with industry experts, she said these new restrictions will bolster national security while having minimum unintended commercial consequences for American companies. National security experts in the U.S. have consistently issued warnings about the prospect of Chinese supercomputers and AI that could result in cyber attacks on the U.S., as well as the construction of new Chinese weapons and highly advanced surveillance architecture that could put the U.S. in harm's way. In 2022, the White House signed the CHIPS and Science Act into law, a bipartisan bill designed to "supercharge" the U.S. semiconductor industry by helping companies compete with China's cutting-edge technologies. Biden's second swipe at the Chinese chip industry came the following year when an executive order blocked U.S. citizens and organizations from investing in certain areas of Chinese tech, including advanced chips. "As technology evolves, and our adversaries seek new ways to evade restrictions, we will continue to work with our allies and partners to proactively and aggressively safeguard our world-leading technologies and know-how so they aren't used to undermine our national security," said White House national security adviser Jake Sullivan about the new restrictions. Chinese foreign ministry spokesperson Lin Jian responded by saying the restrictions will disrupt international trade while violating the laws of the market economy. "We have repeatedly made clear our position on this issue," he said. "China firmly opposes the U.S.'s overstretching the concept of national security, abusing export controls and maliciously blocking and suppressing China."

Biden targets China's chip industry with wider trade bans

WASHINGTON: The Biden administration announced Monday broader restrictions on advanced technology that can be sent to China, in an effort to prevent the country from developing its own advanced chips for military equipment and artificial intelligence. The restrictions prohibit the sale of certain types of chips and machinery to China and add more than 100 Chinese companies to a restricted trade list. The move marks the Biden administration's third major update over the past three years to a set of rules that have tried to cut China off from the world's most advanced technology. The rules are also likely to be the administration's last on Chinese technology before President-elect Donald Trump's inauguration next month, and they aim to cement the Biden administration's legacy in slowing down a rival country's technological progress. National security officials have said China's ability to acquire and make advanced computer chips poses a threat to the United States. The chips are crucial for powering AI and supercomputers that can be used to launch cyberattacks, design new weapons, create surveillance systems and increase the military's ability to respond accurately and rapidly to foreign attacks. The rules advance measures the Biden administration issued in October 2022, and again in October 2023. They have been the subject of fierce lobbying by both national security hawks eager to crack down on China and the chip industry, which has argued that controls that are too tight risk hurting U.S. tech leadership. Both camps ultimately left their mark on the restrictions issued Monday. The rules add 140 Chinese companies, many of which make the tools and machinery necessary for manufacturing chips, to a restricted trade list called the entity list -- one of the largest batches of additions so far. The rules also bar shipments to China of certain advanced memory chips, and establish global restrictions on shipments of roughly two dozen types of equipment used to manufacture chips, effective Dec. 31. They also contain new guidance for U.S. companies to carry out due diligence on the Chinese factories they sell to. But some officials and analysts have said the regulations were shaped by industry lobbying, and have pointed out certain exceptions that may be favorable to U.S. exporters. (This article originally appeared in The New York Times)

US restricts HBM exports to China, a blow to Korea's advanced chipmakers

The Chinese government responded with immediate objections to what it called "economic coercion" The US government recently announced that it was restricting exports of high-bandwidth memory (HBM) to China. The memory in question is a key component in the development of artificial intelligence. The restrictions signal an attempt by the US to clamp down on supplies as China ramps up its independent development of AI semiconductors. The move appears likely to impact exports to China by South Korean businesses such as Samsung Electronics. The Chinese government responded with immediate objections stating its firm opposition to what it characterized as "economic coercion." In a government gazette announcement on Monday, the Bureau of Industry and Security under the US Department of Commerce announced plans for "strengthen[ing] export controls to restrict China's capability to produce advanced semiconductors for military applications." In the announcement, the bureau said that specific HBM items were being included as subject to export restrictions. Secretary of Commerce Gina Raimondo explained that the intent was to "degrade the PRC's ability to make the most advanced chips that they're using in their military modernization." HBM is a high-performance form of memory created by the vertical stacking of multiple DRAM chips. Used chiefly for AI learning and reasoning, it is an essential component in the making of AI conductors. HBM is manufactured exclusively by SK Hynix and Samsung Electronics in South Korea and Micron in the US. Micron does not currently supply to China. The US company Nvidia accounts for over 90% of the AI semiconductor market. The US has barred Nvidia from exporting AI semiconductors to China. In response, China has begun developing its own. This is what the US is now taking action to stop by choking off supplies of key components. In the case of the newly announced export controls, the US Department of Commerce applied foreign direct product rules. This means that the department is capable of restricting exports even of foreign-produced items when they are made with US-produced software. The US holds a semiconductor design software market share of around 80%. The Department of Commerce plans to apply restrictions in the case of items with a memory bandwidth density -- a unit of HBM performance -- of over 2 GB per second per square millimeter. All HBM stacks (structures of multiple layers of memory chips) that are currently produced exceed this standard. Previously, the US government tightened its controls on exports of semiconductor equipment to China with an October 2022 amendment of its Export Administration Regulations to crack down on the leaking of advanced US technology to entities that could undermine US national security. It subsequently convinced South Korea and other allies to introduce similar export restriction measures. Shortly after the US export control measures were announced, the Chinese Ministry of Commerce called them a "typical act of economic coercion and non-market behavior," with the US "interfering in trade between China and third countries by reinforcing its controls of exports of semiconductor manufacturing equipment, memory semiconductors, and other items to China and adding 136 Chinese businesses to its list of companies subject to export restrictions." The ministry also accused the US of "continuously broadening the concept of national security, abusing export control measures, and engaging in unilateral bullying." It went on to say that "the US' abuse of controls is severely disrupting normal economic trade exchanges among countries, seriously damaging market rules and the international economic and trade order, and severely threatening the stability of global industrial supply chains." It added that China planned to "take the necessary measures to firmly safeguard its rightful interests."

U.S. tightens curbs on China's access to AI memory and chip tools

The U.S. unveiled new restrictions on China's access to vital components for chips and AI, escalating a campaign to contain Beijing's technological ambitions but stopping short of earlier proposals that would have sanctioned more key Chinese firms. The Department of Commerce slapped fresh curbs on the sale of high-bandwidth memory chips made by U.S. and foreign companies, likely affecting South Korea's SK Hynix and Samsung Electronics as well as Idaho-based Micron Technology. Those components handle data storage and are essential for AI applications. The agency also expanded existing controls on chipmaking gear, including products made by U.S. firms at foreign facilities, but with carveouts for key allies, such as Japan and the Netherlands. That comes after months of negotiations between Washington, Tokyo and the Hague, during which Biden officials floated -- but ultimately did not pursue -- applying U.S. controls to companies like Tokyo Electron and ASML Holding NV.

US to Introduce New Restrictions on China's Access to Cutting-Edge Chips

The new limits, which are expected to be announced Monday, are intended to slow China's ability to build large and powerful AI models. The Biden administration is expected to announce a sweeping set of measures on Monday designed to further restrain China's ability to develop advanced artificial intelligence, people familiar with the matter told WIRED. The controls could include sanctioning dozens of Chinese companies that produce equipment for making semiconductors, as well as placing restrictions on a handful of chip manufacturing plants, some of which have ties to the Chinese tech giant Huawei. The US Department of Commerce has also discussed including controls on the sale of high-bandwidth memory, or HBM, an advanced kind of 3D-stacked computer memory component that is often used in high-performance GPUs and customized AI chips. Bloomberg previously reported that the Biden administration was considering clamping down on China's access to HBM chips. In total, the Biden administration could end up adding around 200 Chinese firms to an entity list maintained by the Bureau of Industry and Security -- an agency within the Commerce department -- which would require other companies to acquire special licenses to supply them with software or products from the United States. The US government has been discussing the new measures with its allies and representatives from the semiconductor industry for months, and the exact details of what will be announced on Monday were still in flux as of earlier this week. A spokesperson for the Commerce department declined to comment. Huawei did not immediately return a request for comment. Reuters reported on Friday that the US Chamber of Commerce, a powerful advocacy group for American businesses, warned its members in an email last week that a new round of export controls targeting China would be arriving "prior to the Thanksgiving break," though that timing now appears to have been pushed back by a few days. "China is firmly opposed to the US overstretching the concept of national security, abusing export control measures and making malicious attempts to block and suppress China," Mao Ning, a spokesperson for China's foreign ministry, said at a regularly scheduled press conference earlier this week in response to the anticipated controls. The limits on China's access to the high-bandwidth memory seem aimed at slowing the country's efforts to develop domestic chips capable of training very large and powerful AI models. The new restrictions are expected to block access to HMB3, one of the people told WIRED, the latest and most advanced version of the technology, and impose some limits on access to the previous generation, known as HMB2.

New US sanctions on China target chip-making equipment and exports

China is accelerating efforts to increase semiconductor self-sufficiency The United States is expected to implement its third major wave of semiconductor export restrictions targeting China's tech sector in a move believed to affect 140 companies, including Naura Technology Group. If it goes ahead, it would mark another Biden administration effort to curb China's advancements in artificial intelligence and military applications by limiting the People's Republic's access to semiconductor technology. Toolmakers Piotech and SiCarrier Technology could face tighter restrictions and shipments of advanced memory chips and 24 chipmaking tools to China could be barred altogether, according to Reuters. Furthermore, Reuters suggests that more than 100 other Chinese chip equipment manufacturers and two investment firms, Wise Road Capital and Wingtech Technology, could be added to the entity list. Any organizations listed could be prohibited from conducting business with US suppliers without the right licenses, which are rarely granted. The sanctions also include limited exports of high-bandwidth memory chips that are critical for AI training, and chipmaking equipment produced in countries like Israel, Malaysia, Singapore, South Korea and Taiwan. However, Biden's restrictions have not come as a shock to China, which is trying to boost production and become less reliant on other nations. Chinese foreign ministry spokesman Lin Jian previously criticized the US' measures as being harmful to global trade, adding that China would be imposing its own countermeasures to protect domestic companies. Still, Semiconductor Manufacturing International Corporation (SMIC), which has faced restrictions since 2020, is expected to encounter further curbs. News of this third major round of chip-related restrictions during Biden's presidency builds on widespread measures introduced in October 2022. It comes just weeks before Trump takes over office, but despite the change of hands, many believe that Biden's anti-China restrictions could remain in place.

US to block sale of cutting-edge, chip-making equipment to China

The Biden administration announced Monday that it has imposed a new set of export controls on China, restricting the sale of cutting-edge, semiconductor-manufacturing equipment and high-bandwidth computer memory to the communist nation. The new rules ban the sale of 24 different kinds of equipment and three different software tools, all of which are used to produce what are known as "advanced node" semiconductors, the fastest and most efficient chips on the market. The export controls, announced by the Commerce Department's Bureau of Industry and Security, also restrict the transfer of high-bandwidth memory products, which advanced node semiconductors need to maximize their performance in high-intensity applications, such as artificial intelligence and machine learning. At the same time, the government added 140 companies, mostly in China's domestic semiconductor manufacturing industry, to a list of entities that U.S. firms and individuals are restricted from doing business with. In general, exporting certain technologies to companies on the list requires a license from the federal government. Blocking military development The latest round of sanctions is specifically aimed at preventing China from fabricating advanced semiconductors on its own, out of concern that it would then incorporate AI into new military hardware and advanced tools of social control. "Advanced AI models could be used for rapid response scenarios on the battlefield; lowering the barrier to develop cyberweapons or chemical, biological, radiological, or nuclear weapons; and utilizing facial and voice recognition to repress and surveil minorities and political dissidents," the department said in a release announcing the sanctions. "This action is the culmination of the Biden-Harris Administration's targeted approach, in concert with our allies and partners, to impair [China's] ability to indigenize the production of advanced technologies that pose a risk to our national security," U.S. Secretary of Commerce Gina Raimondo said in a statement. "The United States has taken significant steps to protect our technology from being used by our adversaries in ways that threaten our national security," national security adviser Jake Sullivan said in the same statement. "As technology evolves, and our adversaries seek new ways to evade restrictions, we will continue to work with our allies and partners to proactively and aggressively safeguard our world-leading technologies and know-how so they aren't used to undermine our national security." China responds In a statement sent to VOA, the Chinese Embassy in Washington condemned the sanctions. "China strongly opposes the U.S.' latest control measures on semiconductor export. The move is a typical economic coercion and non-market practice," the embassy said. The embassy accused the United States of "overstretching" the idea of national security, abusing export control rules and "bullying." "The semiconductor industry is highly globalized," the statement said. "The US' abuse of regulatory measures severely hinders normal economic and trade exchanges among countries, undermines market rules and the international economic and trade order, and poses a serious threat to the stability of the global industrial and supply chains. The global semiconductor industry, including US companies, has been severely affected." The statement concluded with the promise that, "China will take necessary measures to resolutely safeguard its legitimate rights and interests." Significant impact Stephen Ezell, vice president for global innovation policy at the Information Technology and Innovation Foundation, told VOA that the new sanctions are likely to do real damage to China's effort to create a world-class domestic chip manufacturing industry. In an email exchange with VOA, Ezell said that manufacturing semiconductors is "perhaps the most complex engineering task humanity undertakes," and that simply building the machinery to manufacture them requires a vast array of inputs, access to many of which the U.S. can meaningfully restrict. "Those tools ... depend on literally dozens of thousands of inputs and components, many provided by specialized suppliers from across the world," Ezell wrote. "If Chinese toolmakers don't have ready access to these, it makes their task of recreating a wholly indigenous supply chain that much more difficult and expensive." Ezell said the loss of market share in China will hurt U.S. manufacturers unable to sell into the country, but he pointed out that China's goal has been to eliminate its dependence on foreign chips anyway, which would produce the same result. "The way to deal with the challenge is for the United States (and like-minded allies) to stimulate the growth of semiconductor industries in places like India or Malaysia, so sales that are lost in China can be recaptured elsewhere, because we're expanding semiconductor production in like-minded nations," Ezell said. He added that it is important that the U.S. team up with other major semiconductor manufacturing and equipment-making nations to institute similar policies toward China. Advanced chips The primary target of the new U.S. export controls are so-called "advanced node" chips and the equipment used to manufacture them. Advanced node chips' distinguishing factor is the size of the transistors used in their manufacture. Some transistors can be as small as three nanometers -- three one-billionths of a meter -- in length. The smaller the individual transistors are, means more of them can be placed on a single chip, making them better at processing information, and more energy efficient. For advanced node chips to operate at their full potential, they need to be paired with high-bandwidth computer memory, which can provide high-speed access to vast amounts of data.

Biden's last jab at China: Curbs on memory chips, chipmakers, investors

Joe Biden's final move to stop China from racing ahead of the US in AI may be too little too late, reports say. On Monday, the Biden administration announced new export controls, perhaps most notably restricting exports to China of high-bandwidth memory (HBM) chips used in AI applications. According to Reuters, additional export curbs are designed to also impede China from accessing "24 additional chipmaking tools and three software tools," as well as "chipmaking equipment made in countries such as Singapore and Malaysia." Nearly two dozen Chinese semiconductor companies will be added to the US entity list restricting their access to US technology, Reuters reported, alongside more than 100 chipmaking tool makers and two investment companies. These include many companies that Huawei Technologies -- one of the biggest targets of US export controls for years -- depends on. For any of these companies to receive shipments of restricted US tech, they will need to seek a license that the US rarely ever grants. It seems unlikely that those special licenses will be any easier to secure, as new restrictions also made it harder for China to import any foreign items that use any US-made materials. Now, if there is even a "single" US-made chip in a foreign product, it will be subjected to restrictions, The Washington Post reported. Expanding export controls on China will potentially hurt the US, analysts said. Among US companies most likely to be impacted by export controls are Lam Research, KLA, and Applied Materials, Reuters reported. Non-US companies in allied nations will likely also be affected, such as Dutch equipment-maker ASM International. And South Korea-based Samsung has cause for concern, likely the "only" company impacted by new restrictions on memory used in AI chips, with "30 percent of its HBM chip sales from China," Reuters noted.

Exclusive-Latest US strike on China's chips hits semiconductor toolmakers

(Reuters) - The U.S. will launch its third crackdown in three years on China's semiconductor industry on Monday, restricting exports to 140 companies including chip equipment maker Naura Technology Group, among other moves, according to two people familiar with the matter. The effort to hobble Beijing's chipmaking ambitions will also hit Chinese chip toolmakers Piotech and SiCarrier Technology with new export restrictions as part of the package, which also takes aim at shipments of advanced memory chips and more chipmaking tools to China. The move marks one of the Biden Administration's last large scale effort to stymy China's ability to access and produce chips that can help advance artificial intelligence for military applications or otherwise threaten U.S. national security. It comes just weeks before the swearing in of Republican former president Donald Trump, who is expected to keep in place many of Biden's tough-on-China measures. The package includes curbs on China-bound shipments of high bandwidth memory (HBM) chips, which are critical for high-end applications like AI training; new curbs on 24 additional chipmaking tools and three software tools; and new export restrictions on chipmaking equipment manufactured in countries including Singapore and Malaysia. The tool controls will likely hurt Lam Research, KLA and Applied Materials, as well as non-U.S. companies like Dutch equipment maker ASM International. Among Chinese companies facing new restrictions are nearly two dozen semiconductor companies, two investment companies and over 100 chipmaking tool makers, the sources said. U.S. lawmakers say some of the companies, including Swaysure Technology Co, Qingdao SiEn, and Shenzhen Pensun Technology Co, work with China's Huawei Technologies, the telecommunications equipment leader once hobbled by U.S. sanctions and now at the center of China's advanced chip production and development. They will be added to the entity list, which bars U.S. suppliers from shipping to them without first receiving a special license. China has stepped up its drive to become self-sufficient in the semiconductor sector in recent years, as the U.S. and other countries have restricted exports of the advanced chips and the tools to make them. However, it remains years behind chip industry leaders like Nvidia in AI chips and chip equipment maker ASML in the Netherlands. The U.S. also is poised to place additional restrictions on Semiconductor Manufacturing International, China's largest contract chip manufacturer, which was placed on the Entity List in 2020 but with a policy that allowed billions of dollars worth of licenses to ship goods to it to be granted. For the first time, the U.S. will add two companies that make investments in chips to the entity list. Chinese private equity firm Wise Road Capital and tech firm Wingtech Technology Co will be added. Companies seeking licenses to ship to firms on the Entity List generally get denied. DUTCH AND JAPANESE EXEMPTED An aspect of the new package that addresses the foreign direct product rule could hurt some U.S. allies by limiting what their companies can ship to China. The new rule will expand U.S. powers to curb exports of chipmaking equipment by U.S., Japanese, and Dutch manufacturers made in other parts of the world to certain chip plants in China. Equipment made in Malaysia, Singapore, Israel, Taiwan and South Korea is subject to the rule while the Netherlands and Japan will be exempt. The expanded foreign direct product rule will apply to 16 companies on the entity list that are seen as the most important to China's most advanced chipmaking ambitions. The rule will also lower to zero the amount of U.S. content that determines when certain foreign items are subject to U.S. control. That will allow the U.S. to regulate any item shipped to China from overseas if it contains any U.S. chips. The new rules are being released after lengthy discussions with Japan and the Netherlands, which, along with the U.S., dominate the production of advanced chipmaking equipment. The U.S. plans to exempt countries that put in place similar controls, the people said. Another rule in the package restricts memory used in AI chips that correspond with what is known as "HBM 2" and higher, technology made by South Korea's Samsung and SK Hynix and U.S.-based Micron. Industry sources only expect Samsung Electronics to be impacted. The latest rules are the third major package of chip-related export restrictions on China implemented under the Biden administration. In October 2022, the U.S. published a sweeping set of controls to curb the sale and manufacture of certain high-end chips which were considered to be the biggest shift in U.S. tech policy toward China since the 1990s. (Reporting by Karen Freifeld and David Shepardson; Additional reporting by Brenda Goh; Editing by Chris Sanders, Alexandra Alper and Sonali Paul)

US to tighten semiconductor restrictions on China, targets 140 entities - Reuters By Investing.com

Investing.com-- The U.S. will implement its third major crackdown on China's semiconductor industry, targeting 140 entities with new export restrictions, Reuters reported on Monday, citing sources familiar to the matter. The measures aim to restrict China's access to advanced chips and equipment vital for artificial intelligence and other high-tech applications, reflecting ongoing U.S. efforts to curb Beijing's chipmaking capabilities. The latest measures reportedly include export bans on Chinese chip equipment firms like NAURA Technology Group Co Ltd (SZ:002371), Piotech Inc (SS:688072), and SiCarrier Technology. Additionally, shipments of advanced memory chips, high-bandwidth memory (HBM) chips, and specialized chipmaking tools to China will face new restrictions, the report stated. The tightened controls could impact key suppliers like Lam Research Corp (NASDAQ:LRCX), KLA Corporation (NASDAQ:KLAC), Applied Materials Inc (NASDAQ:AMAT), and non-U.S. firms such as ASM International NV (AS:ASMI), according to the report. The Biden administration's move marks its last major semiconductor-related policy before Donald Trump, known for his tough stance on China, assumes office in January. Trump's administration is expected to maintain or expand these restrictions, focusing on national security concerns related to AI-driven military advancements in China. The U.S. also is poised to place additional restrictions on Semiconductor Manufacturing International Corp (HK:0981) (SMIC), which is already added to the U.S. Entity List, limiting its ability to source American technology without special licenses, Reuters reported. SMIC is China's biggest chipmaker by volume. Chinese private equity firms Wise Road Capital and tech firm Wingtech Technology Co Ltd (SS:600745) will be added to the U.S. Entity List for the first time, the report stated. The expanded rules also include updates to the foreign direct product rule, extending U.S. export controls to chipmaking equipment manufactured outside the U.S., including in countries like Malaysia and South Korea. However, Japan and the Netherlands are exempt, as their governments have implemented similar export restrictions. This latest round of restrictions follows sweeping measures imposed in October 2022, which limited China's access to advanced chips and manufacturing technology. While China has invested heavily in semiconductor self-sufficiency, it remains years behind global leaders like NVIDIA Corporation (NASDAQ:NVDA) and ASML in cutting-edge chip technologies. One other rule in the U.S. package imposes restrictions on memory technology used in AI chips, specifically those classified as HBM 2 and higher. These chips are produced by companies such as South Korea's Samsung (LON:0593xq) Electronics (KS:005930) and SK Hynix Inc (KS:000660) as well as U.S.-based Micron Technology Inc (NASDAQ:MU). Industry analysts anticipate that Samsung Electronics will be the primary company affected by this particular restriction, the Reuters report mentioned.

Biden bars HBM exports to China

The Biden administration has announced restrictions limiting the export of memory critical to the production of AI accelerators and banning sales to more than a hundred entities. The trade restrictions, updated [PDF] by the Bureau of Industry and Security (BIS) on Monday, place limits on the sale of high-bandwidth memory (HBM) to countries of concern without a license. In this case, the country in question is the People's Republic of China. The most sophisticated HBM modules are produced by a handful of vendors - including Korea's Samsung and SK hynix, and US-based Micron. Critically, HBM is an essential component in the high-end GPUs and accelerators used in AI training, inferencing, and scientific computing. HBM's role in those workloads is spelled out in its name: it offers substantially higher bandwidth compared to conventional DDR or GDDR memory, albeit at higher cost and power consumption. Memory bandwidth remains one of the biggest bottlenecks for AI and supercomputing performance, so many chip houses have begun prioritizing it over floating point performance in the latest generations of their hardware. Nvidia's H200 and AMD's MI325X are both bandwidth-boosted versions of their predecessors that replace HBM3 with faster HBM3e memory. The result is particularly noticeable when running the large language models (LLMs) that power popular chatbots like ChatGPT or Baidu's Ernie. The greater the bandwidth, the faster a chatbot can produce out a response - and by extension the more users it can serve. Under the new rules, HBM producers will need to obtain special export licenses to sell the parts to Chinese firms. Along with the restrictions on HBM, the Biden administration is adding 140 Chinese firms to the US Entities blacklist. Note that HBM typically makes use of advanced packaging technologies like TSMC's CoWoS - access to which is already restricted for many prominent Chinese chipmakers and tech giants, including Huawei. China's semiconductor industry is striving to develop products comparable to those the US has effectively banned. As we've previously reported, Semiconductor Manufacturing International Corporation (SMIC) is already working to ramp production of a 7nm process node which has seen use in some Huawei handsets. Meanwhile, Chinese memory vendors are working on their own HBM. Earlier this year, ChangXin Memory Technologies, aka CXMT, reportedly began setting up testing and manufacturing equipment capable of producing the chips in volume. When the first HBM modules will come off CXMT's assembly line - and what kind of performance they can achieve - remains to be seen. HBM isn't strictly necessary to support AI applications. Many Nvidia and AMD GPUs still use GDDR memory and can achieve adequate memory bandwidth of 800-960GB/sec. That's far slower than modern HBM, but more than serviceable for inferencing on smaller LLMs like Meta's Llama 8B or Alibaba's Qwen 2.5 7B. If that won't work, SRAM and scale have also proven effective alternatives to HBM, as demonstrated by the likes of Cerebras and Groq. By allocating large quantities of SRAM to each chip and using high speed interconnects or wafer scale packing to connect them, both developers have been able to achieve extremely high speed throughput for AI inference - even compared to rigs that use standalone HBM. Whether or not SMIC possesses the technology or expertise to replicate these products domestically is another matter entirely. So, while restrictions to HBM exports to China may be a setback, it won't mean China's AI and semiconductor ambitions become unachievable. The Biden administration has enacted many technology export restrictions to deprive China of technologies related to semiconductor manufacturing and AI accelerators. These efforts have included limiting the export of high-performance chips, and a ban on the sale of extreme ultraviolet and deep ultraviolet lithography equipment required to produce them.

US Tightens Curbs on China's Access to AI Memory and Chips Tools

The Biden administration unveiled new restrictions on China's access to vital components for chips and AI, escalating a campaign to contain Beijing's technological ambitions. The Department of Commerce slapped additional curbs on the sale of high-bandwidth memory and chipmaking gear, including that produced by US firms at foreign facilities. It also blacklisted 140 more Chinese entities that it accused of acting on Beijing's behalf, though it didn't name them in an initial statement.

Biden is escalating America's AI chip war with China on his way out

The U.S. is continuing its efforts to curb China's advanced chipmaking ambitions with new trade restrictions. The Department of Commerce introduced more restrictions on the sale of high-bandwidth memory and chipmaking tools to China, including tools produced by U.S. companies abroad. The new rules include controls on 24 types of semiconductor manufacturing equipment, as well as on three types of software tools that can be used to develop or produce chips, the Commerce Department's Bureau of Industry and Security (BIS) said. Additionally, another 140 unnamed Chinese entities -- including semiconductor fabs, tool companies, and investment firms -- accused of working on behalf of the Chinese government were added to the U.S. trade blacklist. The trade restrictions "will restrict the PRC's ability to produce technologies key to its military modernization or repression of human rights," the BIS said in a statement. The updated rules have "two primary objectives," according to the BIS: slowing China's advanced AI developments that have "the potential to change the future of warfare" and "impairing" China's development of its chip ecosystem. "This action builds on BIS's laser-focused work, undertaken over the past few years, to impose strategic controls that have hindered the PRC's ability to produce advanced semiconductors and AI capabilities directly impacting U.S. national security," Alan Estevez, undersecretary of commerce for industry and security, said in a statement. "We are constantly talking to our allies and partners as well as reassessing and updating our controls." U.S. attempts to slow China's advanced chipmaking progress have reportedly stalled Huawei, which is based in the country and was added to the Entity List in 2019 after the U.S. government determined it had "been involved in activities contrary to the national security or foreign policy interests of the United States." In November, Bloomberg reported that the Chinese tech giant was designing its next two Ascend processors with the years-old 7-nanometer process. Huawei is unable to get extreme ultraviolet lithography machines from the Netherlands-based ASML (ASML+0.15%), which are subject to U.S.-led export controls.

U.S. ratchets up sanctions to curtail China's AI and military tech -- no more HBM memory for China

Third turn of the screw adds 140 Chinese groups to the entity list. U.S. sanctions designed to restrict China's ability to import technologies to advance of its AI and military capabilities have been strengthened again, reports the Financial Times. For the third time in three years, restrictions on the export of advanced semiconductor tools and technologies have been tuned to slow China's progress in these fields. The new export controls have been described by US commerce secretary Gina Raimondo as "groundbreaking and sweeping." Among the new measures, the U.S. will add 140 Chinese groups to the 'entity list' of organizations requiring (almost impossible to gain) export licenses. It is also interesting to see that the export of HBM to China will be banned. We have covered the impacts on these technology sanctions frequently over recent years. Of course they have been having sometimes sizable effects on China's semiconductor businesses, and the countries abilities to get hands on the latest and greatest tech. However, there are many reports about how sanctions can get seriously swerved, or even sanctions making China stronger in some ways. Thus, obviously sanctions need occasional modifications to ensure they are having the desired effect. According to an export controls analyst the FT interviewed, the latest sanctions address areas of China's semiconductor business that had been underestimated previously. Specifically, the new measures take aim at domestic chip tool making capabilities. Thus 24 types of chipmaking tools that were not previously targeted are now going to be restricted. Perhaps this will slow down the advances of Chinese companies like Huawei and SMIC. Both these big tech firms have counterintuitively seemed to thrive under sanctions so far. Another source talking to the FT indicated that the U.S. will apply a foreign direct product rule [FDPR] measure to its restrictions to cover non-U.S. companies which have U.S. parts in their tools. However, the newspaper understands that some counties like Japan and the Netherlands won't be subject to FDPR restrictions as they have agreed to apply their own export restrictions. Despite the sizable, and probably impactful, sanctions changes outlined above, the FT comments on some holes which appear to remain. For example, it notes that CXMT, a Chinese producer of HBM, has not been added to the latest entity list. The same goes for some (but not all) SMIC and Huawei shell companies.

Trump effect: 140 Chinese tech firms hit by expanded U.S. restrictions

The U.S. Commerce Department has expanded its export controls on 140 Chinese technology companies, restricting access to essential equipment and software for semiconductor manufacturing. This decision is part of an ongoing effort to mitigate national security risks associated with advanced technologies. The revised entity list includes firms primarily based in China, as well as subsidiaries located in Japan, South Korea, and Singapore. These measures aim to limit China's ability to produce advanced semiconductors critical for artificial intelligence applications. The recent actions by the U.S. reflect a significant escalation in efforts to restrict China's access to critical technology. Among the companies added to the entity list is Naura Technology Group, a key player in semiconductor manufacturing. The new measures encompass not only companies that produce computer chips but also manufacturers of the sophisticated equipment necessary for chip production. This move signals a broader strategy to close off avenues for Chinese firms to leverage U.S. technology for military advancements and other uses deemed threatening to U.S. interests. High-bandwidth memory chips, essential for processing large data sets in AI systems, have also come under tighter controls. The new rules limit exports of these components to China, directly affecting manufacturers like Samsung and Micron Technology, which produce the cutting-edge HBM technology vital for AI training and operations. As a result, firms manufacturing semiconductor fabrication equipment, such as Lam Research and KLA Corp, may see repercussions from these restrictions. China's Commerce Ministry has responded to the expanded controls with strong objections, labeling the measures as economic coercion and a violation of market principles. The ministry stated that it would take actions to safeguard China's rights and interests, although specific details on these counteractions remain undisclosed. The U.S. administration, through statements from Commerce Secretary Gina Raimondo and Matthew S. Axelrod, emphasized that these measures are crucial for national security. Axelrod noted that the goal is to prevent Chinese firms from using American technology to develop their own advanced semiconductor capabilities, which poses a risk not only to the U.S. but also to allied nations. Trump might create his own Binance and call it TruthFi In the wake of these developments, the stock prices of Japanese semiconductor equipment manufacturers rose significantly, as investors responded positively to the anticipated shift in supply chain dynamics. Companies like Advantest and Tokyo Electron saw increases of around 4.6%, while Applied Materials gained 4.9%. Conversely, the market reacted negatively to Chinese companies like Naura Technology Group and Piotech Inc., which experienced declines of 3% and 5.3%, respectively, following the announcement. The newly implemented export controls could instigate a major shift in the semiconductor landscape, compelling Chinese firms to accelerate initiatives aimed at achieving technological self-sufficiency. Beijing has invested heavily in domestic semiconductor initiatives, seeking to reduce its reliance on foreign technology amidst increasing pressures from the U.S. The Chinese government has stated its determination to stabilize and fortify its advanced chip production capabilities. Compounding the complexities of the situation, the U.S. has expanded the "foreign direct product" rule, which allows for more stringent controls over non-U.S. manufacturers that utilize American technology in their products. Companies based in Japan and the Netherlands, while typically exempt, may face indirect repercussions through the actions of their suppliers and partners that engage with the Chinese market. Despite ongoing tensions, the global semiconductor industry remains vigilant.

U.S. Imposes Export Restrictions on Advanced Memory Chips to China

The U.S. is restricting the sale to China of advanced memory chips that are crucial for artificial intelligence development, as part of its annual updates to export controls designed to prevent China from accessing cutting-edge semiconductor technology for military use. This year's updates cover the sale of high bandwidth memory chips, which are key to training generative AI and which enable

Biden administration poised to expand China AI chip sanctions- Wired By Investing.com

Investing.com-- The Biden administration is expected to unveil a comprehensive set of export restrictions aimed at further limiting China's ability to develop advanced artificial intelligence (AI), Wired reported on Wednesday. These new export controls, which could be announced as early as Monday, are anticipated to target Chinese semiconductor production, including companies linked to tech giant Huawei. The proposed measures could include adding around 200 Chinese firms to the U.S. Department of Commerce's Bureau of Industry and Security (BIS) entity list. Firms on this list require special licenses to procure U.S. software or products, significantly restricting their access to critical technologies. Among the focus areas are high-bandwidth memory (HBM) chips, essential components for advanced GPUs and AI chips. Restrictions are expected to affect the latest HBM3 and potentially curtail access to HBM2, a slightly older but still vital technology, Bloomberg had earlier reported that the Biden administration was considering clamping down on China's access to HBM chips. The Biden administration was set to unveil new export restrictions on China as soon as next week, the U.S. Chamber of Commerce told members in an email, Reuters reported last week. These efforts align with ongoing U.S. strategies to curb China's technological advancements. Measures similar to the anticipated restrictions began during the Trump administration, including adding AI startups to the BIS list and blocking Huawei's access to U.S. technology. The Biden administration tightened these controls further in 2022 and 2023, targeting advanced GPUs and closing loopholes that had allowed limited access to restricted technologies. The potential sanctions are expected to intensify challenges for China's AI sector, which relies heavily on advanced semiconductors to train large AI models. The targeted restrictions could disrupt firms like Huawei, which recently sent its Ascend AI training chips to customers, including ByteDance and Baidu (NASDAQ:BIDU), according to a report from The South China Morning Post. Despite past sanctions, Huawei has made notable progress, with reports suggesting it is ramping up domestic alternatives through partnerships with Chinese chipmaker SMIC. The semiconductor industry, a critical component of global trade, could see ripple effects. U.S. chipmakers like NVIDIA Corporation (NASDAQ:NVDA), a leading supplier of high-performance GPUs, may experience reduced demand from Chinese firms, while Chinese tech companies might pivot further toward indigenous technologies or alternative international suppliers. China has strongly opposed the anticipated measures, accusing the U.S. of using national security as a pretext to suppress its technological development. Meanwhile, the U.S. Chamber of Commerce has warned members of the impending controls, suggesting an extended timeline for their rollout, the reports stated.

Latest U.S. strike on China's chips hits semiconductor toolmakers

The U.S. will launch its third crackdown in three years on China's semiconductor industry on Monday, restricting exports to 140 companies, including chip equipment maker Naura Technology Group, among other moves, according to two people familiar with the matter. The effort to hobble Beijing's chipmaking ambitions will also hit Chinese chip toolmakers Piotech and SiCarrier Technology with new export restrictions as part of the package, which also takes aim at shipments of advanced memory chips and more chipmaking tools to China. The move marks one of the Biden Administration's last large scale effort to stymie China's ability to access and produce chips that can help advance artificial intelligence for military applications or otherwise threaten U.S. national security.

US reported to have toned down China chip curbs - Bloomberg By Investing.com

Investing.com -- The Biden administration is reportedly preparing to tighten restrictions on sales of semiconductor equipment and artificial intelligence memory chips to China, marking an escalation in efforts to curb Beijing's technological advancements, Bloomberg News reported citing sources familiar with the matter. The proposed measures, which have undergone several revisions and are not yet finalized, could be announced as early as next week. The deliberations follow months of discussions among U.S. officials, negotiations with allies like Japan and the Netherlands, and lobbying from U.S. chip equipment manufacturers who have warned that severe restrictions could harm their businesses. These adjustments include a narrower focus on which Chinese firms will face sanctions. For instance, while earlier drafts considered adding several Huawei suppliers to a trade restriction list, the current plan omits ChangXin Memory Technologies Inc., which is working on AI memory chip technology, the report added. The Commerce Department and National Security Council have declined to comment on the developments. News of the adjusted measures has led to a rally in chip-related stocks across Asia and Europe. Companies such as ASML Holding NV (AS:ASML) and Tokyo Electron Ltd. (TYO:8035) saw gains, with analysts describing the revised restrictions as less severe than market expectations. The proposed rules would impose sanctions on two Semiconductor Manufacturing International Corp. factories associated with Huawei and add over 100 Chinese firms to a trade blacklist, particularly those involved in semiconductor manufacturing equipment rather than chip fabrication. American equipment manufacturers like Lam Research Corp (NASDAQ:LRCX)., Applied Materials Inc (NASDAQ:AMAT)., and KLA Corp. have pushed back against broader restrictions, citing competitive disadvantages against international rivals whose governments have not fully matched U.S. measures. The U.S. has sought alignment from allies in Japan and the Netherlands, which have enacted partial restrictions but resisted more stringent curbs. While the latest U.S. rules would exempt these countries from provisions under the Foreign Direct Product Rule, their willingness to adopt additional measures remains uncertain.

Semiconductor stocks rally amid new US-China chip curbs By Investing.com

Semiconductor companies experienced a significant surge on Monday, with sector stocks notably outperforming the broader market following the announcement of new restrictions by the Biden administration on China's access to essential chip components and AI technology. The Philadelphia Stock Exchange Semiconductor Index climbed 2.9%, marking its largest one-day percentage increase in roughly a month, while the Nasdaq 100 Index saw a more modest gain of 1.1%. Notable movements in the sector included Intel (NASDAQ:INTC), which jumped 5% after the company announced the departure of CEO Pat Gelsinger. Other semiconductor and AI-related companies also saw their shares rise, with Taiwan Semiconductor Manufacturing Co (NYSE:TSM) up by 5.2%, ARM by 5%, Advanced Micro Devices (NASDAQ:AMD) by 3.5%, and Nvidia (NASDAQ:NVDA) by 0.8%. Companies specializing in semiconductor capital equipment also gained, with Lam Research (NASDAQ:LRCX) increasing by 6%, Applied Materials (NASDAQ:AMAT) by 4.6%, KLA Corp (NASDAQ:KLAC) by 3.1%. The new US measures are aimed at impeding China's ability to develop advanced semiconductors and AI systems that could enhance its military capabilities. The Department of Commerce has implemented additional curbs on the sale of high-bandwidth memory and chipmaking gear, including equipment produced by US firms in foreign countries. Additionally, 140 Chinese entities were added to a blacklist for allegedly acting on behalf of Beijing, though their names were not immediately disclosed. The rules, which have been under consideration for some time, are intended to slow China's progress in the semiconductor field. They include restrictions on the sale of two dozen types of manufacturing equipment and three software tools. These controls apply to both US and foreign companies, utilizing the foreign direct product rule to regulate goods made abroad with US technology. However, there are exemptions for countries capable of imposing similar controls, creating a pathway for allies like Japan and the Netherlands to enact comparable measures. Secretary of Commerce Gina Raimondo commented on the initiative, emphasizing the administration's strategy to address China's military modernization through export controls. The new regulations also target high-bandwidth memory chips, crucial for AI applications, adding to existing restrictions on advanced logic chips. Analysts have been monitoring the situation, with Lynx Equity Strategies noting the potential for the sector to reach a pivotal moment. The release of the full details of the BIS export controls is expected to clarify the impact on individual companies within the semiconductor industry. The initial response to the new restrictions could influence market trends, with some companies potentially benefiting while others may face increased risks.

US export ban on China-bound HBM likely to have mixed impact on Korean chip industry: experts

US export ban on China-bound HBM likely to have mixed impact on Korean chip industry: experts A Samsung banner stands alongside a Korean flag at the company's building in Seoul in this undated photo. Korea Times file The U.S. government's latest restrictions on exports of artificial intelligence (AI) memory chips may benefit Korean chipmakers in the long-run by slowing down China's semiconductor development, but they may also reduce potential demand in the world's most populous market, experts said Tuesday. The U.S. Commerce Department announced a set of new semiconductor controls on Monday (U.S. time), including a sales ban on high bandwidth memory (HBM) chips, a key component for AI accelerators, and an embargo on chipmaking equipment. The HBM restrictions target second-generation HBM2 chips and more advanced products exported to China. Korea's SK hynix and Samsung Electronics, together U.S.-based Micron Technology, currently lead the HBM market, where the latest fifth-generation HBM3E was introduced earlier this year. Insiders anticipate a limited short-term impact on SK hynix and Samsung Electronics due to their low dependence on the Chinese market. In the long term, some experts here anticipate that the U.S. restrictions will slow China's semiconductor advancements, creating opportunities for Korea. "Chinese chipmakers have been growing rapidly in terms of technology with one of the world's biggest markets," said Kim Hyeong-joon, head of the Next Generation Intelligence Semiconductor Foundation. "The U.S. measures will effectively delay China's development of semiconductors and help Korean companies widen the gap with Chinese rivals." Prof. Kwon Hyuk-jun of the semiconductor engineering department at Daegu Gyeongbuk Institute of Science and Technology said the U.S. embargo will weigh heavily on China's strength in AI software and low-powered AI accelerators, where HBM plays a critical role. "China may attempt to develop its own HBM chips, but replacing imported products will be challenging under the U.S. restrictions," he said. "The U.S. containment policy will be beneficial to Korea." Despite these potential benefits, experts expressed concerns about China's role as a major buyer of memory chips and chipmaking equipment. "China is one of the largest markets for HBM products," said Kim, the head of the semiconductor foundation. "The embargo may become less desirable as the market contracts in the future." Prof. Kwon also warned of an over-reliance on the U.S. market. "As the global market shrinks due to restrictions on sales in China, Korean companies must diversify their client base," he said. (Yonhap)

China chip stocks rally on report of less strict US export sanctions By Investing.com

Investing.com-- Shares of major Chinese chipmaking firms rose sharply in Shanghai and Hong Kong trade on Friday after Bloomberg reported the U.S. was considering less strict export restrictions on Beijing than feared. Bloomberg reported this week that the Biden administration was preparing more restrictions on sales of artificial intelligence technology and semiconductor equipment to China, in order to stem Beijing's efforts in the fast-growing AI industry. But the proposed measures are expected to be less stringent than those considered earlier, offering some relief to Chinese markets. Specifically, the U.S. will now reportedly add fewer Chinese companies to an export restriction list than previously planned. The U.S. had imposed strict export restrictions on AI technology to China in 2023, which prevents chipmakers such as NVIDIA Corporation (NASDAQ:NVDA) from selling its most advanced AI chips to the country. Nvidia and other chipmakers have warned that more export restrictions could potentially dent sales. U.S.-China trade ties are expected to be further strained as Donald Trump takes office in January. Trump has threatened to impose sweeping trade tariffs against the country.