Reuters: US to tighten its regulations of chip exports to China

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Although officially still unconfirmed, Reuters reports that Biden’s administration is preparing a new set of sanctions that would stop the exports of sub-14nm semiconductors with AI capabilities as well as chipmaking tools.

The Commerce Department already sent out letters to some of the big companies in the industry that work with China and provide chips to China-based companies. Some of the companies include Nvidia, AMD and Intel and the companies have publicly acknowledged these letters, but most of the officials refrain from commenting.

This sounds a lot like the current restrictions that allow US companies to work with China only after the Commerce Department’s license.

These letters are a common practice that ensures swift enforcement, but only companies receiving the letter are obligated to comply. In the meantime, the Commerce Department is working with Biden’s administration to produce rules that would apply to the whole industry and is expected to be officially revealed next month.

Some believe that even US companies using such chips will be denied access to the Chinese market. Such companies include Dell, HP and Super Micro Computer.

If this goes into motion, it spells trouble for China because despite its technological advancements and production capabilities, there’s not a single Chinese company that has the know-how or the tools to produce competing modern chips at scale. This industry is dominated by the USA, South Korea and Taiwan. So this ban may serve as a choke point for China.

The Biden office will look for support from its allies outside of the US in order to make the ban more effective.

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