The US Commerce Department on Monday introduced a sweeping package of export controls aimed at weakening China's domestic semiconductor ecosystem and undermining the country's ability to produce advanced chips locally. The new regulations ban China from accessing 24 types of chip manufacturing equipment and three software programs, and impose restrictions on sales to China of high-bandwidth memory, or HBM, an advanced type of 3D stacked computer memory component often used in custom AI chips .
“They are the strongest controls the U.S. has ever put in place to undermine the PRC's ability to make the most advanced chips they use in their military modernization,” Commerce Secretary Gina Raimondo said on a call with reporters. The measures are likely to anger Beijing, which has given tens of billions of dollars in subsidies and tax breaks to semiconductor companies hoping to build its own chip sector.
Over the past decade, the United States has become increasingly concerned that China could use advanced computer chips to build AI-powered military weapons or other technology that threatens the US and its allies. To address this problem, the Biden administration has focused its efforts on preventing China from acquiring high-quality semiconductors made by companies such as Nvidia and Taiwan Semiconductor Manufacturing Company Limited (TSMC).
But China proved it could produce high-quality chips on its own, so the US shifted its focus to the components and equipment that Chinese companies like Huawei still rely on to produce their own silicon. The measures announced today are the most far-reaching part of that strategy to date. WIRED previously reported that the Biden administration was working on the provisions, which are the result of months of negotiations with U.S. allies and industry partners.
Responding to the expected measures, Mao Ning, a spokesman for China's Foreign Ministry, last week accused the United States of “exaggerating the concept of national security” and using export controls to suppress China. “Such steps seriously violate the laws of the market economy and the principles of fair competition, disrupt the international economic and trade order and the stability of global industrial and supply chains,” Mao said at a regularly scheduled news conference.
One of the most significant changes introduced is an update to the Foreign Direct Product Rule (FDP), a relatively obscure trade regulation that covers goods made in other countries with U.S. technology, software or components. Previously, only foreign-made equipment and tooling for the production of chips with more than 25 percent U.S. components were subject to the FDP. That threshold is now being eliminated, meaning that if a U.S. technology were used to create, say, a lithographic device in the Netherlands or a memory component in South Korea, it would be subject to U.S. export controls.
