The United States is ramping up efforts to restrict China’s access to advanced semiconductor technology. A new set of measures targeting Chinese companies and chip making tools will go into effect on Monday. This crackdown is part of a broader strategy to curtail Beijing’s ability to develop chips critical for artificial intelligence (AI) and military applications.
New Restrictions on Chinese Companies
The U.S. will impose export restrictions on 140 Chinese companies, including major players like Naura Technology Group, Piotech, and SiCarrier Technology. These firms produce semiconductor tools that are essential for chip manufacturing. The restrictions aim to slow China’s progress in the semiconductor industry, which is vital for both commercial and defense purposes.
Additionally, the U.S. will place new curbs on memory chips, such as high-bandwidth memory (HBM) used in AI applications. These chips are essential for high-performance computing and AI training. Advanced tools required to produce these chips will also face export bans.
Expanding U.S. Control Over Global Shipments
The latest rules extend U.S. authority over semiconductor equipment manufactured in other countries, such as Malaysia, Taiwan, South Korea, and Singapore. These items will now be subject to U.S. control if they contain any U.S.-made components.
Interestingly, the new restrictions exempt Japan and the Netherlands. These countries, along with the U.S., are leading producers of advanced chipmaking equipment. The exemption reflects their agreement with the U.S. to implement similar restrictions on exports to China.
Impact on Major Players
The measures will affect global companies such as Samsung, SK Hynix, and Micron, which manufacture memory chips for AI systems. For instance, restrictions on HBM2 and higher memory chips will limit their sales to China.
Chinese companies on the entity list, including Semiconductor Manufacturing International Corporation (SMIC), face tighter restrictions. SMIC, one of China’s largest chipmakers, was already under partial sanctions but received licenses to continue some operations. Those allowances are now being reconsidered.
For the first time, two investment companies, Wise Road Capital and Wingtech Technology, will also be added to the U.S. entity list. This move highlights the increasing scrutiny of financial investments in China’s chip sector.
Restricting AI and Military Capabilities
The Biden administration has been focused on preventing China from advancing in AI and military technology. This effort includes limiting access to advanced tools and components that could enhance China’s technological capabilities.
The restrictions also aim to counter China’s efforts to become self-reliant in chip manufacturing. Despite heavy investments, China still lags behind industry leaders like the U.S., South Korea, and the Netherlands in producing advanced chips and chipmaking equipment.
A Long History of Tensions
This is the third major package of chip-related restrictions under the Biden administration. In October 2022, the U.S. introduced sweeping controls to block China’s access to high-end chips and tools. That move marked a significant shift in U.S. technology policy towards China.
The latest measures come as part of a broader U.S. strategy to safeguard national security and maintain technological superiority. The restrictions also reflect the increasing competition between the two global powers over advanced technologies.
Implications for Global Trade
These restrictions will likely disrupt global supply chains in the semiconductor industry. U.S. companies like Lam Research, Applied Materials, and KLA, as well as non-U.S. firms like ASML, will face challenges in navigating the new rules.
Countries producing semiconductor equipment may need to comply with stricter regulations to avoid penalties. However, exemptions for Japan and the Netherlands show that the U.S. is working with allies to coordinate these efforts.
China’s Response
China has been working to reduce its dependence on foreign technology. The country has increased investments in its semiconductor industry and aims to become self-sufficient. However, these restrictions present significant hurdles for achieving that goal.
The U.S. has made it clear that any attempts by China to bypass these controls will be met with further action. The measures are part of a broader geopolitical struggle that could reshape the global technology landscape.
The U.S. crackdown on China’s semiconductor industry marks another step in the tech rivalry between the two nations. By restricting access to advanced tools and chips, the U.S. aims to slow China’s progress in AI and military technology. The impact of these measures will be felt across the global semiconductor supply chain, with potential ripple effects on international relations and trade.