US President Joe Biden’s administration unveiled new restrictions on China’s access to vital components for chips and artificial intelligence (AI), escalating a campaign to contain Beijing’s technological ambitions.
The US Department of Commerce slapped additional curbs on the sale of high-bandwidth memory (HBM) and chipmaking gear, including that produced by US firms at foreign facilities. It also blacklisted 140 more Chinese entities that it accused of acting on Beijing’s behalf, although it did not name them in an initial statement.
Full details on the new sanctions and Entity List additions were to be published later yesterday, a US official said.
Photo: AP
The US “will restrict the PRC’s ability to produce technologies key to its military modernization or repression of human rights,” the Bureau of Industry and Security said in a statement.
It expanded the Entity List to include “semiconductor fabs, tool companies, and investment companies that are acting at the behest of Beijing to further the PRC’s advanced chip goals.”
Chinese Ministry of Commerce protested and said it would act to protect its “rights and interests,” without giving any details.
“This is a typical act of economic coercion and non-market practice,” the ministry said in a statement.
The controls unveiled yesterday impose restrictions on the sale to China of two dozen types of manufacturing equipment and three software tools, with exemptions for countries that have the capability of imposing such controls themselves, a senior US administration official said.
The idea is to create a pathway for those countries — such as Japan and the Netherlands — to enact comparable curbs, the official said. Neither Tokyo nor Amsterdam has publicly said they would do so.
The rules do capture the foreign facilities of US companies, using a provision known as the foreign direct product rule (FDPR). That authority allows Washington to control goods made overseas that use even the tiniest amount of US technology.
The use of FDPR, even with exemptions, is an effort to prevent US toolmakers from avoiding trade restrictions by locating their manufacturing in other countries. A recent report from the US Center for Strategic and International Studies, a Washington-based think tank, found that US gear suppliers have increasingly exported products to China from non-US countries since 2016, and especially since 2019.
“This action is the culmination of the Biden-Harris Administration’s targeted approach, in concert with our allies and partners, to impair the PRC’s ability to indigenize the production of advanced technologies that pose a risk to our national security,” US Secretary of Commerce Gina Raimondo said in a statement. “No Administration has been tougher in strategically addressing China’s military modernization through export controls.”
The new controls restrict the sale of HBM chips — essential AI components that handle data — and are in addition to existing curbs affecting advanced logic chips, which serve as the brains of devices.
The memory rules apply to HBM2 and more advanced chips, a senior administration official said, and use FDPR to control both US and foreign firms.
The global leader in providing HBM chips is South Korea’s SK Hynix Inc, followed by Idaho-based Micron Technology Inc and Samsung Electronics Co.
There are exemptions to the rule that allow Western companies to package HBM2 chips in China, the official said. Those exemptions are limited to packaging activities that present low risk of technology being diverted to Chinese firms, the official said.
Additional reporting by AP
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