The Biden administration is tightening restrictions on semiconductor exports to China, aiming to close regulatory loopholes. The US Commerce Department has introduced updated rules to enhance control effectiveness and prevent evasion of restrictions, with a focus on safeguarding national security without unduly disrupting trade.
These regulations will impact advanced AI chips like Nvidia’s H800 and A800 products. Additionally, the export restrictions are being extended to 21 other countries, including Iran and Russia. These measures have already affected the stock prices of major US chip manufacturers and will go into effect in 30 days. The original rules were designed to hinder China’s access to advanced computing chips and the production of sophisticated weaponry, but have been adjusted due to evolving technology.
Following her August visit to China, US Commerce Secretary Gina Raimondo underscored the administration’s resolute commitment to impeding China’s military progress, emphasizing their decision not to extend chip restrictions to other applications.
Specifically, chips utilized in phones, video games, and electric vehicles were intentionally exempted from the updated regulations, as per senior administration officials.
Nevertheless, these assurances are unlikely to assuage Beijing, which remains determined to “prevail in the struggle” for core technologies, bolstering its status as a technological powerhouse.
China’s Foreign Ministry criticized the new rules announced by the Biden administration even before their official release. The spokesperson, Mao Ning, called on the US to stop politicizing trade and tech issues and to avoid disrupting global industrial and supply chains, vowing to safeguard China’s rights and interests. While the US had informed Beijing of the impending updates, there were no negotiations with the Chinese officials.
The ongoing tech rivalry between the world’s top two economies has been intensifying. The US has been working with allies in Europe and Asia to limit the sale of advanced chipmaking equipment to China. In retaliation, China imposed its own restrictions on exports of germanium and gallium, crucial elements for semiconductor production. US chipmakers, including Nvidia, Intel, and AMD, saw their stocks decline following the announcement of new export controls.
Nvidia noted that the rules introduced new licensing requirements for exports to China and other markets. Their A800 chip, created for Chinese customers to bypass last year’s restrictions, will be affected, but the company does not anticipate a significant immediate impact on its financial results due to strong global demand for its products.
The broader US chipmaking industry and the Semiconductor Industry Association expressed concerns about the potentially detrimental effects of overly broad, unilateral controls on the US semiconductor ecosystem. They called for strengthened coordination with allies to ensure a fair competitive environment for all companies.
The European chipmaking industry is also evaluating the implications of the rules, with companies like ASML keeping a close eye on the situation. The US Department of Commerce added 13 Chinese entities to its list of firms with which US companies cannot do business for national security reasons, citing their involvement in the development of advanced computing chips contrary to US national security interests.
(Source: New York Times | CNN)
