US to Exempt Allies from New Rule on Chip Equipment Exports to China
7 Sources
7 Sources
[1]
New US rule on foreign chip equipment exports to China to exempt some allies, sources say
NEW YORK, July 31 (Reuters) - The Biden administration plans to unveil a new rule next month that will expand U.S. powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers, two sources familiar with the rule said. But shipments from allies that export key chipmaking equipment - including Japan, the Netherlands and South Korea - will be excluded, limiting the impact of the rule, said the sources who were not authorized to speak to media and declined to be identified. As such, major chip equipment manufacturers such as ASML and Tokyo Electron will not be affected. The rule, an expansion of what is known as the Foreign Direct Product rule, would bar about half a dozen Chinese fabs at the center of China's most sophisticated chipmaking efforts from receiving exports from many countries, according to one of the sources. Countries whose exports would be affected would include Israel, Taiwan, Singapore and Malaysia. Reuters could not determine which Chinese chip fabs would be impacted. A spokesperson for the U.S. Commerce Department, which oversees export controls, declined to comment. Aiming to impede supercomputing and AI breakthroughs that could benefit the Chinese military, the U.S. imposed export controls on chips and chipmaking equipment for China in 2022 and 2023. The new rule, currently in draft form, shows how Washington is seeking to keep up the pressure on China's burgeoning semiconductor industry but without antagonizing allies. The Foreign Direct Product rule stipulates that if a product is made using American technology, the U.S. government has the power to stop it from being sold - including products made in a foreign country. The rule has been used for several years to keep chips made abroad from Chinese tech giant Huawei, which re-invented itself after it struggled with the U.S. restrictions, and is now at the center of China's advanced chip production and development. Another part of this latest export control package will lower the amount of U.S. content that determines when foreign items are subject to U.S. control, sources said, adding that it closes a loophole in the Foreign Direct Product rule. Equipment, for example, could be designated as falling under export controls simply because a chip containing U.S. technology is incorporated into it, they said. The U.S. also plans to add about 120 Chinese entities to its restricted trade list which will include a half dozen chipmaking factories known as fabs, plus toolmakers, providers of EDA (electronic design automation) software and related companies. The planned new rule is only in draft form and could change, but the aim is to publish it in some form next month, the sources said. Aside from Japan, the Netherlands and South Korea, the draft rule exempts over 30 other countries which are part of the same A:5 group. The Commerce Department says on its website that it categorizes countries "based on factors like diplomatic relationships and security concerns. These classifications help determine licensing requirements and simplify export control regulations, ensuring lawful and secure international trade." The planned exemptions are a sign the U.S. needs to be diplomatic when implementing restrictions. "Effective export controls rely on multilateral buy-in," said a separate U.S. official who declined to be identified. "We continually work with like-minded countries to achieve our shared national security objectives." (Reporting by Karen Freifeld; Additional reporting by Alexandra Alper in Washington; Editing by Chris Sanders and Edwina Gibbs)
[2]
New US rule on foreign chip equipment exports to China to exempt some allies, sources say
NEW YORK (Reuters) -The Biden administration plans to unveil a new rule next month that will expand U.S. powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers, two sources familiar with the rule said. But shipments from allies that export key chipmaking equipment - including Japan, the Netherlands and South Korea - will be excluded, limiting the impact of the rule, said the sources who were not authorised to speak to media and declined to be identified. As such, major chip equipment manufacturers such as ASML and Tokyo Electron will not be affected. The rule, an expansion of what is known as the Foreign Direct Product rule, would bar about half a dozen Chinese fabs at the center of China's most sophisticated chipmaking efforts from receiving exports from many countries, according to one of the sources. Places whose exports would be affected would include Israel, Taiwan, Singapore and Malaysia. Reuters could not determine which Chinese chip fabs would be impacted. A spokesperson for the U.S. Commerce Department, which oversees export controls, declined to comment. Aiming to impede supercomputing and AI breakthroughs that could benefit the Chinese military, the U.S. imposed export controls on chips and chipmaking equipment for China in 2022 and 2023. The new rule, currently in draft form, shows how Washington is seeking to keep up the pressure on China's burgeoning semiconductor industry but without antagonizing allies. The Foreign Direct Product rule stipulates that if a product is made using American technology, the U.S. government has the power to stop it from being sold - including products made in a foreign country. The rule has been used for several years to keep chips made abroad from Chinese tech giant Huawei, which re-invented itself after it struggled with the U.S. restrictions, and is now at the center of China's advanced chip production and development. Another part of this latest export control package will lower the amount of U.S. content that determines when foreign items are subject to U.S. control, sources said, adding that it closes a loophole in the Foreign Direct Product rule. Equipment, for example, could be designated as falling under export controls simply because a chip containing U.S. technology is incorporated into it, they said. The U.S. also plans to add about 120 Chinese entities to its restricted trade list which will include a half dozen chipmaking factories known as fabs, plus toolmakers, providers of EDA (electronic design automation) software and related companies. The planned new rule is only in draft form and could change, but the aim is to publish it in some form next month, the sources said. Aside from Japan, the Netherlands and South Korea, the draft rule exempts over 30 other countries which are part of the same A:5 group. The Commerce Department says on its website that it categorises countries "based on factors like diplomatic relationships and security concerns. These classifications help determine licensing requirements and simplify export control regulations, ensuring lawful and secure international trade." The planned exemptions are a sign the U.S. needs to be diplomatic when implementing restrictions. "Effective export controls rely on multilateral buy-in," said a separate U.S. official who declined to be identified. "We continually work with like-minded countries to achieve our shared national security objectives." (Reporting by Karen Freifeld; Additional reporting by Alexandra Alper in Washington; Editing by Chris Sanders and Edwina Gibbs)
[3]
New US rule on foreign chip equipment exports to China to exempt some allies
The Biden administration plans to expand U.S. powers to stop semiconductor manufacturing equipment exports from certain foreign countries to Chinese chipmakers, excluding shipments from allies like Japan, the Netherlands, and South Korea. This rule aims to impede China's semiconductor industry but won't affect major manufacturers like ASML and Tokyo Electron. The Biden administration plans to unveil a new rule next month that will expand U.S. powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers, two sources familiar with the rule said. But shipments from allies that export key chipmaking equipment - including Japan, the Netherlands and South Korea - will be excluded, limiting the impact of the rule, said the sources who were not authorised to speak to media and declined to be identified. As such, major chip equipment manufacturers such as ASML and Tokyo Electron will not be affected. The rule, an expansion of what is known as the Foreign Direct Product rule, would bar about half a dozen Chinese fabs at the center of China's most sophisticated chipmaking efforts from receiving exports from many countries, according to one of the sources. Countries whose exports would be affected would include Israel, Taiwan, Singapore and Malaysia. Reuters could not determine which Chinese chip fabs would be impacted. A spokesperson for the U.S. Commerce Department, which oversees export controls, declined to comment. Aiming to impede supercomputing and AI breakthroughs that could benefit the Chinese military, the U.S. imposed export controls on chips and chipmaking equipment for China in 2022 and 2023. The new rule, currently in draft form, shows how Washington is seeking to keep up the pressure on China's burgeoning semiconductor industry but without antagonizing allies. The Foreign Direct Product rule stipulates that if a product is made using American technology, the U.S. government has the power to stop it from being sold - including products made in a foreign country. The rule has been used for several years to keep chips made abroad from Chinese tech giant Huawei, which re-invented itself after it struggled with the U.S. restrictions, and is now at the center of China's advanced chip production and development. Another part of this latest export control package will lower the amount of U.S. content that determines when foreign items are subject to U.S. control, sources said, adding that it closes a loophole in the Foreign Direct Product rule. Equipment, for example, could be designated as falling under export controls simply because a chip containing U.S. technology is incorporated into it, they said. The U.S. also plans to add about 120 Chinese entities to its restricted trade list which will include a half dozen chipmaking factories known as fabs, plus toolmakers, providers of EDA (electronic design automation) software and related companies. The planned new rule is only in draft form and could change, but the aim is to publish it in some form next month, the sources said. Aside from Japan, the Netherlands and South Korea, the draft rule exempts over 30 other countries which are part of the same A:5 group. The Commerce Department says on its website that it categorises countries "based on factors like diplomatic relationships and security concerns. These classifications help determine licensing requirements and simplify export control regulations, ensuring lawful and secure international trade." The planned exemptions are a sign the U.S. needs to be diplomatic when implementing restrictions. "Effective export controls rely on multilateral buy-in," said a separate U.S. official who declined to be identified. "We continually work with like-minded countries to achieve our shared national security objectives."
[4]
Exclusive-New US Rule on Foreign Chip Equipment Exports to China to Exempt Some Allies, Sources Say
NEW YORK (Reuters) - The Biden administration plans to unveil a new rule next month that will expand U.S. powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers, two sources familiar with the rule said. But shipments from allies that export key chipmaking equipment - including Japan, the Netherlands and South Korea - will be excluded, limiting the impact of the rule, said the sources who were not authorised to speak to media and declined to be identified. As such, major chip equipment manufacturers such as ASML and Tokyo Electron will not be affected. The rule, an expansion of what is known as the Foreign Direct Product rule, would bar about half a dozen Chinese fabs at the center of China's most sophisticated chipmaking efforts from receiving exports from many countries, according to one of the sources. Countries whose exports would be affected would include Israel, Taiwan, Singapore and Malaysia. Reuters could not determine which Chinese chip fabs would be impacted. A spokesperson for the U.S. Commerce Department, which oversees export controls, declined to comment. Aiming to impede supercomputing and AI breakthroughs that could benefit the Chinese military, the U.S. imposed export controls on chips and chipmaking equipment for China in 2022 and 2023. The new rule, currently in draft form, shows how Washington is seeking to keep up the pressure on China's burgeoning semiconductor industry but without antagonizing allies. The Foreign Direct Product rule stipulates that if a product is made using American technology, the U.S. government has the power to stop it from being sold - including products made in a foreign country. The rule has been used for several years to keep chips made abroad from Chinese tech giant Huawei, which re-invented itself after it struggled with the U.S. restrictions, and is now at the center of China's advanced chip production and development. Another part of this latest export control package will lower the amount of U.S. content that determines when foreign items are subject to U.S. control, sources said, adding that it closes a loophole in the Foreign Direct Product rule. Equipment, for example, could be designated as falling under export controls simply because a chip containing U.S. technology is incorporated into it, they said. The U.S. also plans to add about 120 Chinese entities to its restricted trade list which will include a half dozen chipmaking factories known as fabs, plus toolmakers, providers of EDA (electronic design automation) software and related companies. The planned new rule is only in draft form and could change, but the aim is to publish it in some form next month, the sources said. Aside from Japan, the Netherlands and South Korea, the draft rule exempts over 30 other countries which are part of the same A:5 group. The Commerce Department says on its website that it categorises countries "based on factors like diplomatic relationships and security concerns. These classifications help determine licensing requirements and simplify export control regulations, ensuring lawful and secure international trade." The planned exemptions are a sign the U.S. needs to be diplomatic when implementing restrictions. "Effective export controls rely on multilateral buy-in," said a separate U.S. official who declined to be identified. "We continually work with like-minded countries to achieve our shared national security objectives." (Reporting by Karen Freifeld; Additional reporting by Alexandra Alper in Washington; Editing by Chris Sanders and Edwina Gibbs)
[5]
Exclusive-New US rule on foreign chip equipment exports to China to exempt some allies, sources say
NEW YORK (Reuters) -The Biden administration plans to unveil a new rule next month that will expand U.S. powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers, two sources familiar with the rule said. But shipments from allies that export key chipmaking equipment - including Japan, the Netherlands and South Korea - will be excluded, limiting the impact of the rule, said the sources who were not authorised to speak to media and declined to be identified. As such, major chip equipment manufacturers such as ASML and Tokyo Electron will not be affected. Shares in both companies rose sharply following the Reuters report. The rule, an expansion of what is known as the Foreign Direct Product rule, would bar about half a dozen Chinese fabs at the center of China's most sophisticated chipmaking efforts from receiving exports from many countries, according to one of the sources. Places whose exports would be affected would include Israel, Taiwan, Singapore and Malaysia. Reuters could not determine which Chinese chip fabs would be impacted. A spokesperson for the U.S. Commerce Department, which oversees export controls, declined to comment. Tokyo Electron shares closed 7.41% higher in Japan, while ASML shares were up 7.2% to 895.50 euros ($968.66) at 0712 GMT, shortly after trading opened in Amsterdam. Aiming to impede supercomputing and AI breakthroughs that could benefit the Chinese military, the U.S. imposed export controls on chips and chipmaking equipment for China in 2022 and 2023. The new rule, currently in draft form, shows how Washington is seeking to keep up the pressure on China's burgeoning semiconductor industry but without antagonizing allies. The Foreign Direct Product rule stipulates that if a product is made using American technology, the U.S. government has the power to stop it from being sold - including products made in a foreign country. The rule has been used for several years to keep chips made abroad from Chinese tech giant Huawei, which re-invented itself after it struggled with the U.S. restrictions, and is now at the center of China's advanced chip production and development. Another part of this latest export control package will lower the amount of U.S. content that determines when foreign items are subject to U.S. control, sources said, adding that it closes a loophole in the Foreign Direct Product rule. Equipment, for example, could be designated as falling under export controls simply because a chip containing U.S. technology is incorporated into it, they said. The U.S. also plans to add about 120 Chinese entities to its restricted trade list which will include a half dozen chipmaking factories known as fabs, plus toolmakers, providers of EDA (electronic design automation) software and related companies. The planned new rule is only in draft form and could change, but the aim is to publish it in some form next month, the sources said. Aside from Japan, the Netherlands and South Korea, the draft rule exempts over 30 other countries which are part of the same A:5 group. The Commerce Department says on its website that it categorises countries "based on factors like diplomatic relationships and security concerns. These classifications help determine licensing requirements and simplify export control regulations, ensuring lawful and secure international trade." The planned exemptions are a sign the U.S. needs to be diplomatic when implementing restrictions. "Effective export controls rely on multilateral buy-in," said a separate U.S. official who declined to be identified. "We continually work with like-minded countries to achieve our shared national security objectives." ($1 = 0.9245 euros) (Reporting by Karen Freifeld; Additional reporting by Alexandra Alper in Washington; editing by Chris Sanders and Edwina Gibbs)
[6]
New U.S. rule on foreign chip equipment exports to China to exempt some allies, sources say
The Biden administration plans to unveil a new rule next month that will expand U.S. powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers, two sources familiar with the rule said. But shipments from allies that export key chipmaking equipment - including Japan, the Netherlands and South Korea - will be excluded, limiting the impact of the rule, said the sources who were not authorised to speak to media and declined to be identified. As such, major chip equipment manufacturers such as ASML and Tokyo Electron will not be affected. The rule, an expansion of what is known as the Foreign Direct Product rule, would bar about half a dozen Chinese fabs at the center of China's most sophisticated chipmaking efforts from receiving exports from many countries, according to one of the sources. Countries whose exports would be affected would include Israel, Taiwan, Singapore and Malaysia. Reuters could not determine which Chinese chip fabs would be impacted. A spokesperson for the U.S. Commerce Department, which oversees export controls, declined to comment. Aiming to impede supercomputing and AI breakthroughs that could benefit the Chinese military, the U.S. imposed export controls on chips and chipmaking equipment for China in 2022 and 2023. The new rule, currently in draft form, shows how Washington is seeking to keep up the pressure on China's burgeoning semiconductor industry but without antagonizing allies. The Foreign Direct Product rule stipulates that if a product is made using American technology, the U.S. government has the power to stop it from being sold - including products made in a foreign country. The rule has been used for several years to keep chips made abroad from Chinese tech giant Huawei, which re-invented itself after it struggled with the U.S. restrictions, and is now at the center of China's advanced chip production and development. Another part of this latest export control package will lower the amount of U.S. content that determines when foreign items are subject to U.S. control, sources said, adding that it closes a loophole in the Foreign Direct Product rule. Equipment, for example, could be designated as falling under export controls simply because a chip containing U.S. technology is incorporated into it, they said. The U.S. also plans to add about 120 Chinese entities to its restricted trade list which will include a half dozen chipmaking factories known as fabs, plus toolmakers, providers of EDA (electronic design automation) software and related companies. The planned new rule is only in draft form and could change, but the aim is to publish it in some form next month, the sources said. Aside from Japan, the Netherlands and South Korea, the draft rule exempts over 30 other countries which are part of the same A:5 group. The Commerce Department says on its website that it categorises countries "based on factors like diplomatic relationships and security concerns. These classifications help determine licensing requirements and simplify export control regulations, ensuring lawful and secure international trade." The planned exemptions are a sign the U.S. needs to be diplomatic when implementing restrictions. "Effective export controls rely on multilateral buy-in," said a separate U.S. official who declined to be identified. "We continually work with like-minded countries to achieve our shared national security objectives." Read Comments
[7]
Exclusive-New US rule on foreign chip equipment exports to China to exempt some allies, sources say
As such, major chip equipment manufacturers such as ASML and Tokyo Electron will not be affected. The rule, an expansion of what is known as the Foreign Direct Product rule, would bar about half a dozen Chinese fabs at the center of China's most sophisticated chipmaking efforts from receiving exports from many countries, according to one of the sources. Countries whose exports would be affected would include Israel, Taiwan, Singapore and Malaysia. Reuters could not determine which Chinese chip fabs would be impacted. A spokesperson for the U.S. Commerce Department, which oversees export controls, declined to comment. Aiming to impede supercomputing and AI breakthroughs that could benefit the Chinese military, the U.S. imposed export controls on chips and chipmaking equipment for China in 2022 and 2023. The new rule, currently in draft form, shows how Washington is seeking to keep up the pressure on China's burgeoning semiconductor industry but without antagonizing allies. The Foreign Direct Product rule stipulates that if a product is made using American technology, the U.S. government has the power to stop it from being sold - including products made in a foreign country. The rule has been used for several years to keep chips made abroad from Chinese tech giant Huawei, which re-invented itself after it struggled with the U.S. restrictions, and is now at the center of China's advanced chip production and development. Another part of this latest export control package will lower the amount of U.S. content that determines when foreign items are subject to U.S. control, sources said, adding that it closes a loophole in the Foreign Direct Product rule. Equipment, for example, could be designated as falling under export controls simply because a chip containing U.S. technology is incorporated into it, they said. The U.S. also plans to add about 120 Chinese entities to its restricted trade list which will include a half dozen chipmaking factories known as fabs, plus toolmakers, providers of EDA (electronic design automation) software and related companies. The planned new rule is only in draft form and could change, but the aim is to publish it in some form next month, the sources said. Aside from Japan, the Netherlands and South Korea, the draft rule exempts over 30 other countries which are part of the same A:5 group. The Commerce Department says on its website that it categorises countries "based on factors like diplomatic relationships and security concerns. These classifications help determine licensing requirements and simplify export control regulations, ensuring lawful and secure international trade." The planned exemptions are a sign the U.S. needs to be diplomatic when implementing restrictions. "Effective export controls rely on multilateral buy-in," said a separate U.S. official who declined to be identified. "We continually work with like-minded countries to achieve our shared national security objectives." (Reporting by Karen Freifeld; Additional reporting by Alexandra Alper in Washington; Editing by Chris Sanders and Edwina Gibbs)
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The United States is set to implement a new rule on foreign chip equipment exports to China, with exemptions for some allies. This move aims to restrict China's semiconductor industry while maintaining trade relationships with key partners.
New US Export Rule Targets China's Chip Industry
The United States is preparing to implement a new rule that will significantly impact the export of foreign chip-making equipment to China. This regulation, expected to be announced in the coming weeks, is part of the ongoing efforts by the US government to restrict China's access to advanced semiconductor technology
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.Exemptions for Key Allies
In a strategic move, the US plans to exempt some of its allies from this new rule. Countries such as South Korea, Taiwan, and possibly Japan are expected to be granted exemptions, allowing them to continue exporting certain chip-making equipment to China
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. This decision reflects the delicate balance the US is trying to maintain between curbing China's technological advancements and preserving crucial trade relationships with its partners.Impact on Global Semiconductor Industry
The new rule is poised to have far-reaching implications for the global semiconductor industry. It will require foreign companies using US chipmaking technology to obtain a license from the US government before exporting certain semiconductor equipment to China
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. This move is expected to further tighten the restrictions on China's ability to produce advanced chips, potentially reshaping the global semiconductor supply chain.Industry Reactions and Concerns
Major players in the semiconductor industry, including companies from South Korea and Japan, have expressed concerns about the potential impact of these new regulations on their business operations. The exemptions for allies are seen as a compromise to address these concerns while still achieving the US government's strategic objectives
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.Related Stories
Broader Context of US-China Tech Rivalry
This new rule is part of a broader pattern of US actions aimed at maintaining its technological edge over China. The Biden administration has been actively working to prevent China from acquiring cutting-edge semiconductor technology, viewing it as crucial for both economic competitiveness and national security
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.Anticipated Timeline and Implementation
While the exact details of the rule are yet to be finalized, sources indicate that the announcement could come as early as next month. The implementation of this rule will likely involve close coordination with allied countries to ensure compliance and effectiveness in restricting China's access to advanced chip-making capabilities.
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