WASHINGTON: The US plans to tighten sweeping measures to restrict China’s access to advanced semiconductors and chip-making equipment, in a bid to prevent its geopolitical rival from acquiring advanced technologies that could give the country a military edge.
The latest rules aim to refine and close loopholes announced last October, according to people familiar with the matter. The Biden administration is seeking to strengthen controls on sales of graphics chips for artificial intelligence applications and advanced chip-making equipment to Chinese companies, the people said, asking not to be named because the rules have not yet been finalized. be public.
The US will also impose additional controls on Chinese companies that try to circumvent export restrictions by routing shipments through other countries, and add Chinese chip design companies to a list of trade restrictions, requiring foreign manufacturers to obtain a US license to fulfill orders from those companies .
The U.S. unveiled the original chip restrictions a year ago in an aggressive effort to curb China’s technological development, a move the Biden administration says is necessary for national security. China has pushed back against the restrictions and accelerated investment in building its own domestic capabilities.
The updated restrictions will be published early this week, people familiar with the deliberations said. A spokesperson for the National Security Council declined to comment, as did a spokeswoman for the Commerce Department’s Bureau of Industry and Security.
Chip-related stocks fell in Asia after Bloomberg’s report on the latest restrictions. In Japan, Tokyo Electron Ltd, Advantest Corp and Disco Corp all fell at least 4%, while South Korean stocks such as Hana Micron Inc also fell.
The Biden administration has drawn criticism over perceived shortcomings in the original export controls. The US unveiled the original restrictions before gaining support from key allies, notably the Netherlands and Japan, allowing chip equipment companies in those countries to continue selling advanced equipment to Chinese customers.
That helped facilitate China’s progress in developing its domestic technological capabilities. Huawei Technologies Co, a Chinese telecommunications giant at the center of US-China tensions, quietly introduced a new smartphone in August, powered by an advanced 7-nanometer processor. When the phone was torn down, it turned out that the chip had been produced by a Chinese company, showing that its manufacturing capabilities are well beyond where the US had set out to stop its advance.
The achievement cast doubt on Washington’s ability to thwart Beijing’s technological ambitions and boosted political pressure on the Biden administration to impose more sanctions on Huawei and its chip manufacturing partner, Semiconductor Manufacturing International Corp. The US has launched a formal investigation into the Huawei phone. Any resulting restrictions on Huawei or SMIC would be a separate process from the new export control rules.
“While the Huawei phone itself is not a major national security problem for the United States, what the chip inside it signals about the state of China’s semiconductor industry absolutely is,” said Gregory Allen, director of the Wadhwani Center for AI and Advanced Technologies at the University of Washington. Center for Strategic and International Studies, wrote in a report this month. “These advanced chip manufacturing capabilities will inevitably be made available to the Chinese military, if they have not already done so. The breakthrough of Huawei and SMIC therefore raises many difficult questions about the effectiveness of the current American approach.”
The latest rules aim to refine and close loopholes announced last October, according to people familiar with the matter. The Biden administration is seeking to strengthen controls on sales of graphics chips for artificial intelligence applications and advanced chip-making equipment to Chinese companies, the people said, asking not to be named because the rules have not yet been finalized. be public.
The US will also impose additional controls on Chinese companies that try to circumvent export restrictions by routing shipments through other countries, and add Chinese chip design companies to a list of trade restrictions, requiring foreign manufacturers to obtain a US license to fulfill orders from those companies .
The U.S. unveiled the original chip restrictions a year ago in an aggressive effort to curb China’s technological development, a move the Biden administration says is necessary for national security. China has pushed back against the restrictions and accelerated investment in building its own domestic capabilities.
The updated restrictions will be published early this week, people familiar with the deliberations said. A spokesperson for the National Security Council declined to comment, as did a spokeswoman for the Commerce Department’s Bureau of Industry and Security.
Chip-related stocks fell in Asia after Bloomberg’s report on the latest restrictions. In Japan, Tokyo Electron Ltd, Advantest Corp and Disco Corp all fell at least 4%, while South Korean stocks such as Hana Micron Inc also fell.
The Biden administration has drawn criticism over perceived shortcomings in the original export controls. The US unveiled the original restrictions before gaining support from key allies, notably the Netherlands and Japan, allowing chip equipment companies in those countries to continue selling advanced equipment to Chinese customers.
That helped facilitate China’s progress in developing its domestic technological capabilities. Huawei Technologies Co, a Chinese telecommunications giant at the center of US-China tensions, quietly introduced a new smartphone in August, powered by an advanced 7-nanometer processor. When the phone was torn down, it turned out that the chip had been produced by a Chinese company, showing that its manufacturing capabilities are well beyond where the US had set out to stop its advance.
The achievement cast doubt on Washington’s ability to thwart Beijing’s technological ambitions and boosted political pressure on the Biden administration to impose more sanctions on Huawei and its chip manufacturing partner, Semiconductor Manufacturing International Corp. The US has launched a formal investigation into the Huawei phone. Any resulting restrictions on Huawei or SMIC would be a separate process from the new export control rules.
“While the Huawei phone itself is not a major national security problem for the United States, what the chip inside it signals about the state of China’s semiconductor industry absolutely is,” said Gregory Allen, director of the Wadhwani Center for AI and Advanced Technologies at the University of Washington. Center for Strategic and International Studies, wrote in a report this month. “These advanced chip manufacturing capabilities will inevitably be made available to the Chinese military, if they have not already done so. The breakthrough of Huawei and SMIC therefore raises many difficult questions about the effectiveness of the current American approach.”
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