“U.S. Steps Up Sanctions on China’s Chip Industry for the Third Time in Three Years”
On Monday, the U.S. government intensified its restrictions against China’s semiconductor industry. For the third time in three years, the U.S. curtailed exports to 140 companies, including Naura Technology Group, a prominent chip equipment manufacturer, in addition to other significant steps.
This move is part of a larger strategy to impede Beijing’s progress in chip-making. It also targets Chinese chip tool manufacturers like Piotech, ACM Research, and SiCarrier Technology with fresh export limitations. The restrictions extend to the shipment of advanced memory chips and additional chip-making tools to China.
The recent restrictions are part of the Biden administration’s final large-scale efforts to limit China’s capacity to access and manufacture chips that could potentially advance its military AI or pose a threat to U.S. national security.
This comes just ahead of the inauguration of President-Elect Donald Trump, who is anticipated to uphold many of Biden’s stringent measures against China. The restrictions entail curbs on the shipment of high bandwidth memory chips essential for sophisticated applications like AI training to China. It also includes new limitations on 24 additional chip-making tools, three software tools, and restrictions on exporting chip-making equipment produced in countries like Singapore and Malaysia.
U.S. Commerce Secretary Gina Raimondo stated that the move is designed to hinder China from advancing its domestic semiconductor manufacturing system, which would potentially support its military modernization efforts.
The restrictions are likely to impact companies like Lam Research, KLA, and Applied Materials, as well as non-U.S. entities like Dutch equipment manufacturer ASM International. Chinese firms facing new limitations include approximately two dozen semiconductor companies and over 100 chip-making tool manufacturers. These companies, including Swaysure Technology Co, Si’En Qingdao, and Shenzhen Pensun Technology Co, collaborate with China’s Huawei Technologies, a telecom equipment leader now at the heart of China’s advanced chip production and development due to U.S. sanctions.
These companies will be added to the entity list, which requires U.S. suppliers to obtain a special license before shipping to them. In response to the U.S. restrictions, Chinese foreign ministry spokesman Lin Jian stated that such actions undermine the international economic trade order and disrupt global supply chains.
China’s commerce ministry labeled the U.S. restrictions as a clear instance of “economic coercion” and “non-market practices.” China has been intensifying its efforts to become self-reliant in the semiconductor sector as the U.S. and other nations have limited exports of advanced chips and the tools to produce them. However, China still lags behind industry leaders like Nvidia in AI chips and ASML in the Netherlands in chip equipment manufacturing.
The U.S. is also set to impose further restrictions on Semiconductor Manufacturing International Co., China’s largest contract chip manufacturer. For the first time, three companies that invest in chips will be added to the entity list.
The new rules are a result of lengthy discussions with Japan and the Netherlands, who, along with the United States, dominate the production of advanced chip-making equipment. The U.S. plans to exempt countries that adopt similar controls.
The recent rules are the third major package of chip-related export curbs on China adopted under the Biden administration. In October 2022, the U.S. released a comprehensive set of controls on the sale and manufacture of certain high-end chips, which was viewed as the biggest shift in its tech policy towards China since the 1990s.
