The U.S. Department of Commerce on Monday introduced a sweeping export control package aimed at weakening China’s domestic semiconductor ecosystem and undermining the country’s ability to produce advanced chips locally. The recent regulations bar China from accessing 24 types of chip-making equipment and three software programs and place restrictions on sales to China of high-bandwidth memory, or HBM, an advanced type of frequently used computer memory component stacked 3D in custom AI chips.
“These are the strictest controls the United States has ever put in place, designed to limit the PRC’s ability to produce the most advanced chips they use to modernize its military,” Commerce Secretary Gina Raimondo said on a call with reporters. The measures are likely to enrage Beijing, which has given tens of billions of dollars the value of subsidies and tax breaks to semiconductor companies in hopes of building their own chip sector.
Over the past decade, the United States has become increasingly concerned about China’s ability to utilize cutting-edge computer chips to build military weapons based on artificial intelligence or other technology that threaten the United States and its allies. To address this problem, the Biden administration has focused its efforts on preventing China from acquiring high-end semiconductors produced by companies such as Nvidia and Taiwan Semiconductor Manufacturing Company Constrained (TSMC).
But China has proven it can produce high-end chips on its own, so the United States has focused on components and equipment that Chinese companies like Huawei continue to rely to produce our own silicon. The measures announced today are the most far-reaching part of this strategy so far. WIRED previously reported that the Biden administration is working on the provisions, which are the result of months of negotiations with U.S. allies and industry partners.
In response to the anticipated measures, Mao Ning, a spokesman for China’s foreign ministry, last week accused the United States of “overstretching the concept of national security” and using export controls to suppress China. “Such moves seriously violate the laws of a 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 meeting press conference.
One of the most significant changes introduced is an update to the Foreign Direct Products (FDP) regulations, relatively unknown trade regulations that cover goods manufactured in other countries using American technology, software and components. Previously, only foreign-made chip manufacturing equipment and tools with more than 25 percent of components coming from the U.S. were subject to the FDP. That threshold is now being lifted, meaning that if any U.S. technology was used to create, say, a lithography tool in the Netherlands or a memory item in South Korea, it will be subject to U.S. export controls.