The US plans to tighten sweeping measures to restrict China’s access to advanced semiconductors and chipmaking gear, seeking to prevent its geopolitical rival from obtaining cutting-edge technologies that could give it a military edge.
The latest rules aim to refine and close loopholes from curbs announced in October last year, people familiar with the matter said.
US President Joe Biden’s administration is seeking to strengthen controls on selling graphics chips for artificial intelligence (AI) applications and advanced chipmaking equipment to Chinese firms, the people said, asking not to be named because the rules are not yet public.
Photo: Reuters
The US is also to impose additional checks on Chinese firms attempting to evade export restrictions by routing shipments through other nations, and add Chinese chip design firms to a trade restriction list, requiring overseas manufacturers to gain a US license to fill orders from those companies.
The US unveiled the original chip restrictions a year ago in an aggressive attempt to curtail China’s technological development, a step the Biden administration said was necessary for national security. China has bristled at the restrictions and accelerated investments in building its own domestic capabilities.
The updated restrictions are to be published early this week, people familiar with the deliberations said.
A spokesman for the National Security Council declined to comment, as did a spokeswoman for the US Department of Commerce’s Bureau of Industry and Security.
In August, Huawei Technologies Co (華為) quietly introduced a new smartphone, the Mate 60 Pro, powered by an advanced, 7-nanometer processor.
A teardown of the phone revealed that the chip was produced by a Chinese company, demonstrating manufacturing capabilities well beyond where the US had sought to stop its advance.
The achievement cast doubt on Washington’s ability to thwart Beijing’s technological ambitions, and spurred political pressure for the Biden administration to impose more sanctions on Huawei and its chipmaking partner, Semiconductor Manufacturing International Corp (SMIC, 中芯).
The US has begun a formal investigation into the Huawei phone. Any resulting restrictions on Huawei or SMIC would be a separate process from the new export control rules.
“While the Huawei phone is not itself a major national security issue for the United States, what the chip inside signals about the state of the Chinese semiconductor industry absolutely is,” Gregory Allen, director of the Wadhwani Center for AI and Advanced Technologies at the Center for Strategic and International Studies, wrote in a report this month.
“These advanced chip production capabilities will inevitably be made available to the Chinese military if they have not been already,” Allen wrote. “Thus, the Huawei and SMIC breakthrough raises many tough questions about the efficacy of the current US approach.”
While several companies including ASML Holding NV and Nvidia Corp have objected to the new restrictions, the Biden administration is seeking to address several outstanding issues with tighter rules, particularly the development of AI and the shipment of technologies through other countries.
The new controls on graphics chips cover components called accelerators, which are used in data centers to train AI software. The Biden administration is tweaking the parameters that govern the export of those chips to China — a move that comes after Nvidia developed a China-specific model to work around last year’s curbs.
In addition, the rules would restrict shipments of certain chips to Chinese companies’ overseas subsidiaries and affiliates, and require a license to export prohibited technologies to countries that could be used as intermediaries.
At the same time, Washington acquiesced to companies’ calls for fewer blanket restrictions, as industry leaders say they need to sell into the world’s largest chip market. Under the new rules, firms would be allowed to export to China all but the most powerful consumer graphics chips, which are typically used in gamer PCs, and would have to notify the US government before shipping a select few consumer chips at the cutting edge.
The US also extended waivers for Samsung Electronics Co, SK Hynix Inc and Taiwan Semiconductor Manufacturing Co (台積電) to continue shipping some restricted chipmaking technology to their facilities in China.
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