The US is launching its third crackdown on China’s semiconductor industry, targeting 140 companies, including Naura Technology Group. This initiative aims to restrict China’s chipmaking ambitions, especially regarding AI-related technologies. The measures encompass new restrictions on memory chips and chipmaking tools, impacting major US and international firms while continuing to put pressure on China’s semiconductor self-sufficiency efforts.
The United States is set to implement its third significant crackdown on China’s semiconductor industry, impacting exports to 140 companies, including prominent chip equipment manufacturer Naura Technology Group. This initiative aims to undermine China’s aspirations in chip manufacturing, targeting key toolmakers such as Piotech and SiCarrier Technology alongside shipments of advanced memory chips. This escalation reflects the Biden Administration’s strategy to curtail access to chips that could enhance artificial intelligence capabilities relevant to military purposes, posing threats to US national security. Notably, this action coincides with the anticipated inauguration of former President Donald Trump, expected to maintain stringent trade policies against China.
The latest package comprises export limitations on high bandwidth memory (HBM) chips essential for artificial intelligence applications, in addition to new restrictions on 24 specific chipmaking tools and three software tools. Major US companies, including Lam Research, KLA, and Applied Materials, alongside international entities like ASM International, are expected to face consequences from these regulations. The measures also encompass two dozen Chinese semiconductor companies, various investment firms, and over a hundred chipmaking tool manufacturers, many of which are associated with Huawei Technologies. These entities will be added to the Entity List, which restricts US suppliers from conducting business without governmental approval.
Despite these challenges, China is intensifying its efforts toward semiconductor self-sufficiency. Nevertheless, industry analysts assert that China continues to lag behind leading manufacturers such as Nvidia in artificial intelligence chips and ASML in chipmaking equipment. The US is poised to impose further restrictions on Semiconductor Manufacturing International, China’s largest contract chip producer, which has previously benefited from a policy permitting substantial licensing shipments. This newest round of restrictions notably includes private equity and tech firms Wise Road Capital and Wingtech Technology Co as new additions to the Entity List.
Furthermore, an expanded foreign direct product rule will affect various US allies by imposing stricter controls on chipmaking equipment manufactured within their jurisdictions. Under this rule, companies from Malaysia, Singapore, and other regions will face limits on exports to China, while Japan and the Netherlands are exempted from such constraints. This development has emerged following consultations with these allied countries, which, alongside the US, hold a dominant position in advanced chipmaking equipment production. The package’s new stipulations include a pivotal aspect concerning memory utilized in AI chips, further underscoring the US’s strategic implementation of export controls since the comprehensive measures introduced in October 2022.
The ongoing US-China trade tensions, particularly in technology and semiconductor sectors, have prompted the US government to adopt stringent export controls aimed at limiting China’s access to critical technologies. The semiconductor industry is crucial as it underpins advancements in artificial intelligence, military applications, and overall technological development. The Biden Administration’s approach is part of a broader strategy to counter China’s increasing technological capabilities and ensure national security. This crackdown reflects a shift from the previous policies whereby China received significant technology transfers and collaborations from Western companies. Given the geopolitical climate, the stakes of semiconductor production and control have escalated, emphasizing self-sufficiency and strategic advantage in the semiconductor supply chain.
In summary, the forthcoming US export restrictions on China’s semiconductor industry represent a continuation of the Biden Administration’s efforts to hinder China’s technological progress, particularly in advanced chip manufacturing critical for military and AI applications. The measures encompass a substantial number of companies and new rules affecting exports from US allies as well. As China strives for self-sufficiency amidst these constraints, the long-term implications for global technology supply chains and geopolitical dynamics remain significant.
Original Source: www.business-standard.com
