The outgoing US administration plans to impose extensive sanctions on China’s chip industry and ban exports to 140 companies. This information comes from the news agency Reuters, citing two anonymous sources. This is one of the last significant measures by US President Joe Biden’s administration to prevent China from accessing advanced chips for AI technology. It is expected that his successor, Donald Trump, will not change this policy. For the first time, Chinese companies investing in the chip industry are affected.
The latest sanctions include restrictions on the export of High-Bandwidth Memory (HBM), 24 additional manufacturing tools, and three different software tools. Chip manufacturing technology from Singapore and Malaysia is also reportedly prohibited from being delivered to Chinese companies. The US government claims further sanctioning powers for manufacturers from the USA, Japan, and the Netherlands. These manufacturers are only allowed to deliver products made in Japan or the Netherlands, affecting companies like the Dutch corporation ASML.
This imminent step is already the third attempt to hinder China’s chip industry through sanctions. Originally, in October 2022, the US government banned the sale of the most powerful GPU accelerators, which are crucial for training AI algorithms. However, Nvidia bypassed the ban with adapted versions of its fastest models and through a loophole, prompting the US government to adjust the bans in the fall of 2023. The third round of regulations is expected to impact various manufacturers again. Reuters reports that the US government plans to exempt countries that implement similar restrictions from the sanctions.
The export bans on HBM are likely to affect South Korean companies Samsung and SK Hynix, as well as Micron from the USA. The exact consequences remain to be seen. The Wall Street Journal has already noted that the long wait for the next round of sanctions may have given China’s economy enough time to stockpile the now-blocked technology. This demonstrates the challenges the US government faces in effectively hindering China’s progress.