The administration of US President Joe Biden next month is to broaden curbs on US exports to China of semiconductors used for artificial intelligence and chipmaking tools, several people familiar with the matter said.
The US Department of Commerce intends to publish new regulations based on restrictions communicated in letters earlier this year to three US 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 department letters sent last month to Nvidia Corp and Advanced Micro Devices (AMD) instructing the firm 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 companies that receive them.
Turning the letters into rules would broaden their reach and could subject other US 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 start-ups such as 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 Hewlett Packard said they were monitoring the situation, while Super Micro Computer did not comment.
A spokesperson for the Commerce Department on Friday said that it is “taking a comprehensive approach” to “protect US national security and foreign policy interests,” including preventing China from acquiring US technology applicable to military modernization.
Liu Pengyu (劉鵬宇), a spokesman for the Chinese embassy in Washington, on Tuesday said that China opposes the “abuse of export control measures to restrict the export of semiconductor-related items to China.”
The upcoming restrictions contravene international trade rules, harm global growth and hurt US and Chinese companies, he said.
The planned action comes as Washington has sought to thwart China’s advances by targeting technologies where the US 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.
In an update on China-related measures last week, the Chamber of Commerce, a US 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 ‘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.
The Biden administration has been 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 last month reported plans to turn the letters sent to toolmakers into a regulation.
US 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 US firms would be barred from shipping, two of the sources said.
“Coordination with allies is key to maximizing effectiveness and minimizing unintended consequences,” former White House trade official Clete Willems said. “This should favor broader regulations that others can replicate instead of one-off ‘is informed’ letters.”
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