Biden to broaden Chinese chip and tool export curbs

US President Joe Biden’s administration will next month expand restrictions on US exports to China of semiconductors used in artificial intelligence tools and chipmaking, several people familiar with the matter said.

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

The letters, which the companies publicly acknowledged, banned them from exporting chipmaking equipment to Chinese factories that make advanced semiconductors with sub-14-nanometer processes unless the vendors obtain licenses from the trade department.

Photo: EPA-EFE

The rules would also codify restrictions in departmental letters sent to Nvidia Corp and Advanced Micro Devices (AMD) last month, directing the company to halt shipments of several artificial intelligence computing chips to China unless they receive licenses.

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

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So-called “informed” letters allow the trade department to bypass lengthy rule-writing processes to quickly roll out controls, but the letters only apply to companies that receive them.

Converting the letters into rules would expand their reach and could subject other US companies producing similar technologies 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.

A source said the rules could also impose licensing requirements for shipments to China of products containing the target chips. Dell Technologies, Hewlett Packard Enterprise and Super Micro Computer manufacture data center servers that contain Nvidia’s A100 chip.

Dell and Hewlett Packard said they were monitoring the situation, while Super Micro Computer had no comment.

A spokesman for the Commerce Department said on Friday that it was taking “a comprehensive approach” to “protect U.S. national security and foreign policy interests,” including preventing China from acquiring U.S. technology suitable for military modernization .

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Liu Pengyu (劉鵬宇), a spokesman for the Chinese Embassy in Washington, said Tuesday that China opposes the “abuse of export control measures to restrict exports of semiconductor-related items to China.”

The upcoming restrictions violate international trade rules, hurt 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 retains its dominance.

“The strategy is to stall China and they discovered that chips are a bottleneck. They can’t make this stuff, they can’t make the production 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 lobby group, warned members of upcoming restrictions on AI chips and chip-making tools.

“We are now hearing that members should expect a set of rules, or perhaps an overarching rule, before the midterm elections to codify guidance in recently issued ‘Is Informed’ letters to chip equipment and chip design companies,” the chamber said.

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The group also said the agency plans to blacklist more Chinese supercomputing companies.

The Biden administration has been actively discussing a ban on exports of chipmaking tools to Chinese factories that make advanced semiconductors with a 14-nanometer node and smaller.

Tech news outlet Protocol reported last month plans to turn the letters sent to toolmakers into an ordinance.

US officials have reached out to allies to get them to issue similar guidelines to prevent foreign companies from selling 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,” said Clete Willems, former White House trade secretary. “This should favor broader regulations that others can replicate rather than one-off ‘informed’ letters.”

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