The U.S. is set to introduce its third major set of restrictions in three years targeting China’s semiconductor sector. Scheduled to take effect on Monday, these measures will impose stringent export controls on 140 entities, including prominent chip equipment makers like Naura Technology Group. This move intensifies efforts to hinder China’s chipmaking capabilities, especially in sectors critical to artificial intelligence and military applications, according to sources familiar with the plan.
Broad Impact on Chinese and Global Chipmakers
The new package will extend export restrictions to Chinese toolmakers such as Piotech and SiCarrier Technology, alongside curbs on advanced memory chips and essential chipmaking tools. The rules also restrict exports of high-bandwidth memory (HBM) chips crucial for AI applications, as well as 24 chipmaking tools and three software technologies. These restrictions aim to limit China’s ability to access advanced technology critical for producing cutting-edge semiconductors.
Global semiconductor giants, including U.S.-based Lam Research, KLA, and Applied Materials, as well as Dutch firm ASM International, are expected to feel the effects of these tool-related export controls. Additionally, nearly two dozen Chinese semiconductor companies, two investment firms, and over 100 chip tool manufacturers will face tighter restrictions.
Focus on Huawei and Chinese Semiconductor Firms
Several companies, including Swaysure Technology, Qingdao SiEn, and Shenzhen Pensun Technology, which are linked to Huawei Technologies, will be added to the U.S. Entity List. Inclusion on this list effectively blocks U.S. suppliers from conducting business with these entities without special licenses, which are rarely granted.
Chinese officials have condemned the restrictions, with Foreign Ministry spokesperson Lin Jian criticizing the measures for disrupting global supply chains and undermining international trade norms. Despite these challenges, China continues to push for self-sufficiency in semiconductor production, though it remains significantly behind global leaders like Nvidia in AI chips and ASML in advanced manufacturing tools.
Expanding Foreign Direct Product Rules
The U.S. is also tightening foreign direct product rules, expanding its control over chipmaking equipment made outside the country by U.S., Japanese, and Dutch firms. These measures will subject equipment produced in regions such as Israel, Singapore, and South Korea to U.S. export controls, while Japan and the Netherlands, key allies, will be exempt.
The expanded rules will target 16 Chinese entities deemed critical to advancing the country’s semiconductor industry. Additionally, the threshold for U.S. content in foreign-manufactured items subject to U.S. controls will be reduced to zero, giving the U.S. more leverage in regulating overseas exports to China.
Memory Chip Restrictions
Another significant aspect of the new measures focuses on memory technology used in AI chips. The restrictions will limit exports of HBM chips at levels equivalent to “HBM 2” or higher, affecting major players like Samsung, SK Hynix, and Micron. Analysts estimate that China accounts for around 30% of Samsung’s HBM chip sales.
A Strategic Shift in U.S. Tech Policy
These latest restrictions represent a continuation of the Biden administration’s efforts to curb China’s technological and military advancements. The initiative follows similar measures introduced in October 2022, which were hailed as the most substantial shift in U.S. technology policy toward China since the 1990s.
By collaborating with allies like Japan and the Netherlands, the U.S. aims to solidify a united front in controlling the export of advanced technologies. This alignment underscores the global significance of semiconductor technology and its central role in geopolitics.
Leave feedback about this