US Tightens Chip Export Controls to China, Blacklists Chinese AI Firms

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On Tue, 14 Jan, 8:03 AM UTC

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The Biden administration has introduced new export controls on advanced chips and added Chinese AI companies to a trade blacklist, escalating efforts to restrict China's access to cutting-edge semiconductor technology.

US Expands Export Controls on Advanced Chips

The Biden administration has introduced new measures to tighten controls on the export of advanced computing semiconductors to China. These regulations aim to prevent the diversion of cutting-edge technology that could be used for military purposes or artificial intelligence development 12. The new rules require chip factories and packaging companies to obtain licenses for exporting certain advanced chips, unless specific conditions are met 3.

Chinese AI Firms Added to US Trade Blacklist

In a significant move, the US Commerce Department has added more than two dozen Chinese entities to its restricted trade list, known as the Entity List 1. Notable additions include:

  1. Zhipu AI: A developer of large language models, added for allegedly advancing China's military modernization through advanced AI research 1.
  2. Sophgo: A company whose TSMC-made chip was reportedly incorporated into a Huawei artificial intelligence processor 12.

Companies on this list are prohibited from receiving goods or technology exports without a license, which is generally denied 1.

Implications for Major Chip Manufacturers

The new regulations are expected to impact major chip manufacturers such as Taiwan Semiconductor Manufacturing Company (TSMC), Samsung, and Intel 35. These companies are now encouraged to improve customer scrutiny and due diligence to prevent advanced technology from reaching Chinese customers 3. The measures follow the discovery of TSMC-made technology in a cutting-edge AI chip developed by Huawei, which is already under US sanctions 3.

Broader Context of US-China Tech Tensions

These actions are part of a broader effort by the US to maintain its technological edge and address national security concerns related to China's advancements in AI and military capabilities 34. Earlier this week, the US also published new guidelines aimed at curbing AI chip sales from US firms to specific countries and companies 3.

International Responses and Industry Reactions

The Netherlands, home to semiconductor equipment maker ASML, has also introduced new export control rules requiring licenses for certain measuring and inspection tools 3. Meanwhile, the Chinese government has expressed strong opposition to these measures, vowing to take action to safeguard its interests 4.

US tech giant Nvidia has criticized the Biden administration's approach, calling it "misguided" and arguing that it could undermine America's technological leadership 2. The company expressed concerns about the potential impact on innovation and global competitiveness.

Future Implications and Political Considerations

As the Biden administration comes to a close, these new regulations add to a series of actions aimed at restricting China's access to advanced semiconductor technology 45. However, the implementation and potential modifications of these policies will fall to the incoming Trump administration, raising questions about the future direction of US-China tech relations and export controls 45.

The semiconductor industry and international trade relationships will likely continue to be shaped by these evolving regulations, as the global competition for technological supremacy intensifies.

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