U.S. Government Tightens China’s Export Bans on Chip-Making Devices

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Doing quickly at the expense of quality: Washington is preparing new rules to ban exports of advanced chip-making devices to China, a move that could be too little too late, however, as Asian manufacturing firms are already engaged in making sub-14 semiconductors. n.

The Biden administration is preparing new, tougher restrictions on China’s chipmaking industry. After a series of so-called “is informed” letters sent earlier this year to a few U.S. companies, the Commerce Department now plans to turn these individual letters into a larger message to China: we won’t let you exploit our superior computer technology and know-how for your own gain.

The letters were sent to KLA Corp, Lam Research Corp and Applied Materials Inc., and their authenticity was later confirmed. The U.S. Department of Commerce ordered the three companies to stop exporting chipmaking machinery and equipment needed to manufacture semiconductor components with sub-14 nanometer processes to China. Only sellers who have obtained an appropriate export license from Washington should continue to do business with Beijing.

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The new ban could join those already imposed on Nvidia and AMD on sales of AI accelerators and high-performance GPUs; Worse, at least from China’s perspective, the letters will likely be codified in new Commerce Department rules intended to affect the entire US semiconductor industry.

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Washington uses “is informed” letters to avoid the lengthy rule-making process and to impose new controls more quickly, but the restrictions only apply to companies that receive the letter.

The prospect of new export limits is being discussed and actively watched by Intel and Cerebras Systems, both involved in the production of similar AI accelerators sold by Nvidia and AMD. OEM companies such as Dell, HPE and Supermicro are also interested in the new rules because they sell servers equipped with Nvidia’s A100 Ampere GPU.

While the government’s official position has yet to be revealed, a senior official said that “as a general rule” the Commerce Department seeks to “codify all restrictions contained in informed letters with a regulatory change.” The Biden administration plans to “stifle” China’s ability to manufacture advanced computer technology without outside help, but the effort could be wasted as Asian semiconductor giant SMIC has apparently already been able to produce chips with a 7nm manufacturing process.

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