On Monday, December 2, the U.S. government will implement the third wave of export controls on chips to China, limiting supplies to 140 Chinese companies. Additional control measures will be enforced, affecting chip equipment manufacturers such as Northern Huachuang, Tuojing Technology, and Shenzhen Xinkailai.
This move is considered the final large-scale action by the Biden administration to strengthen the blockade on Chinese technology. These chips are essential for advancing military applications of artificial intelligence (AI) and may pose a threat to U.S. national security.
With just a few weeks left until the inauguration of Republican President Trump, it is expected that many of the hardline measures on China put in place by the Biden administration will be maintained under the Trump administration.
According to sources, the latest measures include restrictions on the export of High Bandwidth Memory (HBM) chips to China, which are crucial for AI training.
Furthermore, the U.S. plans to impose new restrictions on 24 other types of chip manufacturing tools and 3 software tools, as well as export restrictions on chip manufacturing equipment produced in Singapore, Malaysia, Israel, Taiwan, and South Korea.
These control measures on tools may impact the sales of companies such as Lam Research Corp, KLA, Applied Materials, and ASML, a Dutch lithography equipment manufacturer.
Sources mention that over 20 semiconductor firms, two investment companies, and more than 100 chip manufacturing equipment producers are among the Chinese companies facing new restrictions.
U.S. lawmakers noted that some of these companies, including Swaysure Technology Co, Qingdao SiEn, and Shenzhen Pensun Technology Co, have partnerships with Huawei. These companies will be included in the entity list, prohibiting U.S. suppliers from shipping to them without special authorization.
In recent years, China has intensified efforts to achieve self-sufficiency in the semiconductor field due to restrictions on advanced chips and manufacturing tools from the U.S. and other countries. However, it still lags behind leading chip companies like Nvidia and ASML.
The U.S. is also preparing to impose further restrictions on SMIC, China’s largest chip foundry. Although SMIC was added to the entity list in 2020, a policy allowed the issuance of supply licenses worth billions of dollars to them.
For the first time, two chip investment companies will be added to the entity list, Wise Road Capital, a Chinese private equity firm, and Wen Tai Technology, a technology company.
The expanded Foreign Direct Product Rule (FDPR) will apply to 16 companies on the entity list, which are considered crucial enterprises for China’s advanced chip manufacturing development program.
Under the new regulation, the U.S. can control any product shipped from overseas to China as long as it contains U.S. chips.
Reuters noted that the new rules were announced after long negotiations with Japan and the Netherlands, which, along with the U.S., lead in the production of advanced chip manufacturing equipment.
Sources indicated that the U.S. plans to grant exemptions to countries implementing similar controls.
These latest regulations mark the third set of export restrictions on chips to China by the Biden administration. In October 2022, the U.S. introduced the first comprehensive set of measures, restricting sales and production of certain high-end chips, considered the most significant shift in U.S. technology policy towards China since the 1990s.
(Information sourced from an exclusive report by Reuters)