According to knowledgeable sources, a senior U.S. official is set to visit Japan and the Netherlands to urge both allied countries to impose new restrictions on China’s semiconductor industry, including limiting their capacity to manufacture high-end storage chips essential for artificial intelligence. This move is expected to further weaken the Chinese Communist Party’s development in the field of artificial intelligence chip technology.
Anonymous insiders revealed to Bloomberg on Tuesday that Alan Estevez, the Deputy Secretary of Commerce responsible for industrial and security affairs, will push for more restrictions on the activities of Dutch semiconductor equipment manufacturer ASML Holding NV and Japanese Tokyo Electron Ltd. in China during his visits to The Hague and Tokyo.
The American delegation is anticipated to visit the Netherlands after the new Dutch cabinet takes office in the first week of July. Estevez’s request is part of the ongoing dialogue between the U.S. and its allies, with a focus on the development of high-bandwidth storage chips in Chinese chip factories.
ASML and Tokyo Electron’s machines are used in the production of Dynamic Random Access Memory (DRAM) chips, with High Bandwidth Memory (HBM) chips being composed of these stacked DRAM chips.
HBM chips are an essential part of the artificial intelligence hardware ecosystem as they can speed up memory access and facilitate the advancement of artificial intelligence. AI accelerators produced by companies like Nvidia and AMD require bundling with HBM chips to function.
According to Bloomberg, U.S. officials are in early discussions about restricting the export of HBM chips. Chinese companies involved in HBM chip development, including Wuhan Xinxin Semiconductor Manufacturing Co., a subsidiary of Yangtze Memory Technologies Co., have been identified based on data from China’s corporate information provider Qichacha.
Yangtze Memory, headquartered in Wuhan, once held hopes of making breakthroughs in the global chip market for the Chinese Communist Party since its establishment in 2016. However, under severe U.S. sanctions, these hopes have been dashed. In December 2022, the U.S. Department of Commerce’s Bureau of Industry and Security included Yangtze Memory and 35 Chinese entities on a trade blacklist, restricting these companies from purchasing American products and services without U.S. government approval.
It’s reported that Huawei Technologies Co. and ChangXin Memory Technologies Inc. are also in the development of HBM chips. With Chinese companies no longer able to acquire advanced AI chips from Nvidia, Huawei had to develop its own AI accelerator called Ascend. Currently, it’s unclear which companies are providing Huawei with advanced storage chips. Following strengthened sanctions against Huawei in 2020, SK Hynix, Samsung, and Micron stopped supplying chips to Huawei.
For years, the Biden administration has been following up on restricting China’s ability to purchase and produce advanced semiconductors. The White House emphasizes that these chip control measures are not to hinder China’s economic development but to ensure U.S. security. Currently, the U.S. is seeking allies’ support to jointly impose stricter restrictions to more effectively hinder China’s advancement in advanced semiconductor technology.
Secretary of Commerce Gina Raimondo mentioned earlier in March that the U.S. might further enhance control over China’s access to advanced semiconductor technology. Bloomberg quoted Gregory Allen from the Center for Strategic and International Studies (CSIS) saying, “The U.S. is a critical player in the global semiconductor equipment industry, but it is by no means the only important country. Japan and the Netherlands are also major suppliers of semiconductor equipment.”
He emphasizes, “The Netherlands and Japan have restrictions on exports, but not on services, which is a critical limitation within the entire technical control framework.” According to insiders who spoke to Bloomberg, the U.S. delegation is expected to reaffirm a long-term U.S. strategy, demanding both countries to strengthen restrictions on ASML and Tokyo Electron’s ability to maintain and repair other advanced equipment in China. Similar restrictions have already been imposed on some U.S. companies, including Applied Materials Inc and Lam Research Corp.