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    Home » US Launches New Semiconductor Curbs to Block China’s AI Advancements

    US Launches New Semiconductor Curbs to Block China’s AI Advancements

    Resham BhambaniBy Resham BhambaniDecember 2, 2024 World No Comments3 Mins Read
    Semiconductor

    US Tightens Semiconductor Export Controls to Hamper China’s Tech Advancements

    The US is set to implement its third major semiconductor export crackdown in three years, targeting over 140 Chinese companies, including Naura Technology Group and other key chip toolmakers. This move is aimed at curbing China’s ability to produce advanced semiconductors critical for military applications and artificial intelligence, as part of broader efforts to safeguard US national security.

    Key Measures in the Crackdown

    The new restrictions will limit shipments of advanced memory chips, such as high bandwidth memory (HBM) chips used in AI training, and impose curbs on 24 additional chipmaking tools. These controls will impact both US companies like Lam Research, KLA, and Applied Materials, as well as non-US firms such as the Netherlands’ ASM International.

    Additional measures include expanding the foreign direct product rule, enabling the US to regulate items shipped to China if they contain any US-origin components. This will impact semiconductor manufacturing equipment from countries like South Korea, Taiwan, and Singapore, although Japan and the Netherlands are exempted following bilateral agreements.

    Focus on Chinese Companies and Investments

    The restrictions will add over 100 Chinese chipmaking tool manufacturers and two investment firms, Wise Road Capital and Wingtech Technology, to the US Entity List. Firms on this list face significant barriers, as US suppliers must obtain special licenses—typically denied—to conduct business with them.

    Among the targeted companies are those linked to Huawei, which has been at the forefront of China’s chip development. Huawei remains a focal point of US sanctions due to its perceived security threats.

    Strategic and Global Impact

    China has been pushing for self-sufficiency in semiconductors to counter growing restrictions. However, the country remains behind global leaders like Nvidia in AI chips and ASML in chipmaking equipment. These latest US measures aim to widen the technological gap further.

    The crackdown also introduces new complexities for international trade. By lowering the US content threshold for regulating foreign-made items, the rules tighten export pathways for China while exempting nations aligned with similar restrictions. Samsung Electronics is expected to be significantly impacted, with analysts estimating that 30% of its HBM chip sales are tied to China.

    Responses and Repercussions

    China’s foreign ministry has condemned the move, accusing the US of undermining international trade norms and disrupting global supply chains. Beijing has vowed to protect its companies’ interests, though it faces mounting pressure to innovate domestically amid the restrictions.

    This latest action builds on sweeping controls introduced by the Biden administration in October 2022, marking one of the most significant shifts in US tech policy toward China since the 1990s. With the impending swearing-in of President-elect Donald Trump, continuity in the US’s tough-on-China stance appears likely.

    Broader Implications

    The tightening of semiconductor export controls underscores the strategic importance of chips in geopolitical competition. As the US, Japan, and the Netherlands consolidate their dominance in advanced chipmaking equipment, China’s path to technological parity faces increasing hurdles. The long-term impact of these restrictions on the global semiconductor market remains to be seen.

    With inputs from Reuters

    Author

    • Resham Bhambani
      Resham Bhambani

      Research Associate at Interstellar.| China Scholar | China Social Media & Foreign Affairs|

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    Research Associate at Interstellar.| China Scholar | China Social Media & Foreign Affairs|

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