US to Announce New Limits on Chip Technology Exports to China
Last Updated on: 4th October 2022, 05:59 pm
The Biden administration is planning to announce new restrictions on China’s access to U.S. semiconductor technology. The new restrictions will prohibit Chinese companies from buying most semiconductor technology from U.S. companies. The restrictions will also prohibit U.S. companies from selling their semiconductor technology to Chinese companies.
The restrictions will be implemented in two stages.
The First Stage will prohibit Chinese companies from buying most semiconductor technology from U.S. companies.
The Second Stage will prohibit U.S. companies from selling their semiconductor technology to Chinese companies. The restrictions will be effective immediately. The Biden administration plans to announce the new restrictions at a press conference on Tuesday.
Washington is escalating its efforts to stifle Beijing’s industrial ambitions, risking a slowdown in the country’s $550 billion sector. On Thursday, the US announced new limits on chip technology exports to China, a move that could significantly impact China’s semiconductor industry.
US to Announce New Limits on Chip Technology Exports to China
The Commerce Department will roll out a package of rules this week to govern which semiconductor technologies can be exported to China, including codifying earlier guidance given to specific companies. The new rules, which were first reported by The Wall Street Journal, will give companies more clarity on which technologies they are allowed to export to China and make it easier for them to comply with Beijing’s restrictions on chip technology exports.
The new rules come as part of the Biden administration’s broader effort to tighten restrictions on Chinese investment in the United States and its efforts to reduce the trade deficit with China. Last year, Beijing announced a set of restrictions on chip technology exports that targeted technologies that Beijing said were essential to the development of its own semiconductor industry.
Since then, the Biden administration has been working to roll out a package of rules that will govern which semiconductor technologies can be exported to China. According to the Journal report, the new rules will codify earlier guidance given to specific companies and ensure that companies are complying with Beijing’s restrictions. The new rules are also expected to make it easier for companies to export chip technology to China.
The White House and Commerce Department have refused to comment on a report in The Wall Street Journal that the US will announce new limits on chip technology exports to China. The Journal report says the US is concerned about China’s growing dominance in the semiconductor market, and its efforts to limit the US access to high-end semiconductor technology.
World’s Second-Biggest Economy
The US has been increasingly focused on limiting access to high-end semiconductor technology and boosting its own domestic production capacity, as part of its broader strategic competition with the world’s second-biggest economy. The new limits announced by the US are likely to increase the pressure on China to open up its market to US semiconductor companies.
The Biden administration is set to announce new limits on chip technology exports to China, according to two people familiar with the matter. The restrictions, which are expected to be announced Thursday, would apply to both Nvidia Corp. and Advanced Micro Devices Inc. The move comes after lawmakers have long pushed the White House to tighten controls around semiconductor equipment in China, with prior actions more focused on companies designated as risks to national security, such as Huawei Technologies Co.
Foundry Technology
The new restrictions would apply to so-called “foundry” technology, which is used to make chips for mobile devices and other products. They would prevent American companies from selling any such technology to Chinese companies unless they can prove that the technology will not be used in any products that could be sold to the Chinese military.
The United States will announce new restrictions on chip technology exports to China this week, the people said. As a general guide in chip manufacturing, the smaller the number of nanometers indicates more advanced capabilities.
14-nanometer chips are the most advanced and will be the subject of the restrictions, the people said. Chips produced using 14-nanometer Technology are more powerful and can run faster and more efficiently than chips made using an older technology.
