Biden to Hit China with Broader Curbs on U.S. Chip and Tool Exports

Damon

Summary:

The Biden administration plans next month to broaden curbs on U.S shipments to China of semiconductors used for artificial intelligence and chipmaking tools, several people familiar with the matter said.

The Commerce Department intends to publish new regulations based on restrictions communicated in letters earlier this year to three U.S. companies -- KLA Corp, Lam Research Corp and Applied Materials Inc, the people said, speaking on the condition of anonymity.

The letters, which the companies publicly acknowledged, forbade them from exporting chipmaking equipment to Chinese factories that produce advanced semiconductors with sub-14 nanometer processes unless the sellers obtain Commerce Department licenses.

The rules would also codify restrictions in Commerce Department letters sent to Nvidia Corp and Advanced Micro Devices last month instructing them to halt shipments of several artificial intelligence computing chips to China unless they obtain licenses.

Some of the sources said the regulations would likely include additional actions against China. The restrictions could also be changed and the rules published later than expected.

So-called "is informed" letters allow the Commerce Department to bypass lengthy rule-writing processes to put controls in place quickly, but the letters only apply to the companies that receive them.

Turning the letters into rules would broaden their reach and could subject other U.S. companies producing similar technology to the restrictions. The regulations could potentially apply to companies trying to challenge Nvidia and AMD's dominance in artificial intelligence chips.

Intel Corp and startups like Cerebras Systems are targeting the same advanced computing markets. Intel said it is closely monitoring the situation, while Cerebras declined to comment.

One source said the rules could also impose license requirements on shipments to China of products that contain the targeted chips. Dell Technologies, Hewlett Packard Enterprise and Super Micro Computer make data center servers that contain Nvidia's A100 chip.

Dell and HPE said they were monitoring the situation, while Super Micro Computer did not respond to a request for comment.

A senior Commerce official declined to comment on the upcoming action, but said: "As a general rule, we look to codify any restrictions that are in is-informed letters with a regulatory change."

A spokesperson for the Commerce Department on Friday declined to comment on specific regulations but reiterated that it is "taking a comprehensive approach to implement additional actions...to protect U.S. national security and foreign policy interests," including to keep China from acquiring U.S. technology applicable to military modernization.

Liu Pengyu, a spokesperson for the Chinese Embassy in Washington, said on Tuesday that China opposes the United States'"abuse of export control measures to restrict the export of semiconductor-related items to China." The upcoming restrictions violate international trade rules, harm global growth and hurt U.S. and Chinese companies, he said.

KLA, Applied Materials and Nvidia declined to comment while Lam did not respond to requests for comment. AMD did not comment on the specific policy move but reaffirmed it does not foresee a "material impact" from its new licensing requirement.

'Choke point'

The planned action comes as the President Joe Biden's administration has sought to thwart China's advances by targeting technologies where the United States still maintains dominance.

"The strategy is to choke off China and they have discovered that chips are a choke point. They can't make this stuff, they can't make the manufacturing equipment," said Jim Lewis a technology expert at the Center for Strategic and International Studies. "That will change."

In an update on China-related measures last week, the Chamber of Commerce, a U.S. business lobbying group, warned members of imminent restrictions on AI chips and chipmaking tools.

"We are now hearing that members should expect a series of rules or perhaps an overarching rule prior to the mid-term election to codify the guidance in recently issued (Commerce Department) 'is-informed' letters to chip equipment and chip design companies," the chamber said.

The group also said the agency plans to add additional Chinese supercomputing entities to a trade blacklist.

Reuters was first to report in July that the Biden administration was actively discussing banning exports of chipmaking tools to Chinese factories that make advanced semiconductors at the 14-nanometer node and smaller. Tech news outlet Protocol reported plans to turn the letters sent to toolmakers into a regulation last month. Other elements of the rules, including the curbs on AI chip exports and the October release date, were first reported by Reuters.

U.S. officials have reached out to allies to lobby them to enact similar policies so that foreign companies would not be able to sell technology to China that American firms would be barred from shipping, two of the sources said.

"Coordination with allies is key to maximizing effectiveness and minimizing unintended consequences," Clete Willems, a former Trump administration trade official said. "This should favor broader regulations that others can replicate instead of one-off 'is informed' letters."

Source: Reuters

Risk Warnings and Investment Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or signal, or any other product is suitable for you based on your investment objectives and financial situation.

Quick Access to 7x24

Quick Access to More Editor-selected Real-time News

Full Access to Pro Video Channel

FastBull project team is dedicated to create exclusive videos

Real-Time Quotes

View more faster market quotes

More comprehensive macro data and economic indicators

Members have access to entire historical data, guests can only view the last 4 years

Member-only Database

Comprehensive forex, commodity, and equity market data

7x24

Real Time Quotes

Economic Calendar

Economic Calendar
Events
Holiday

Policy Rates

BANKS ACT (%) PREV (%) CPI (%)

English

简体中文

繁體中文

العربية

Home News Columns AI News Economic Calendar Quotes Videos Data Warehouse Analysis AI Signals Pro User Agreement Privacy Policy About Us

Risk Disclosure

The risk of loss in trading financial assets such as stocks, FX, commodities, futures, bonds, ETFs or crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No consideration to invest should be made without thoroughly conduct your own due diligence, or consult with your financial advisors. Our web content might not suit you, since we have not known your financial condition and investment needs. It is possible that our financial information might have latency or contains inaccuracy, so you should be fully responsible for any of your transactions and investment decisions. The company will not be responsible for your capital lost.

Without getting the permission from the website, you are not allow to copy the website graphics, texts, or trade marks. Intellectual property rights in the content or data incorporated into this website belongs to its providers and exchange merchants.

Russia-Ukraine Conflict

Situation in Taiwan Strait

The Fed

China-U.S. Relations

FastBull Featured

FastBull

Devin Wang

Winkelmann

Recent Searches

Trending Searches

Quotes

7x24

Biden to Hit China with Broader Curbs on U.S. Chip and Tool Exports

'Choke point'

Source: Reuters

Risk Disclosure