Biden Further Restricts China On Chip Shipments

The Biden administration plans to expand restrictions on U.S. exports to China of semiconductors used in artificial intelligence and chip production.

According to anonymous sources, the Trade Division plans to enforce the restrictions against KLA, Lam Research, and Applied Materials. Without approval from the Business Division, the government would forbid the groups to sell chipmaking equipment in China. AMD and Nvidia both have a monthly shipment cap on artificial intelligence products to China for chip processing.

A spokesperson for the organization stated that while the Trade Division is reviewing strategy toward China, they are unable to comment on the expansion of product checks. The new, unfinished criteria would aim to prevent "China's buying and utilization of U.S. innovation regarding its military-common combination program to fuel its tactical modernization attempts, lead to denials of basic freedoms, and empower other malign exercises."

This would be President Biden's most recent effort to fortify the U.S. This is just the latest sign of growing tension between the United States and China over technological advances that could threaten public safety, according to experts in the field.

In August, Biden signed a landmark piece of legislation encouraging domestic semiconductor production. The rule diverts $52 billion in incentives to boost the local chip industry and reduce reliance on imports of semiconductors for automobiles, consumer electronics, and other applications. It could also be critical in increasing the United States' competitiveness in innovative work with China and other Asian countries.

Trade Secretary Gina Raimondo said that the U.S.'s share of making semiconductor chips has dropped from 40% to 12% in the past few years.

The procedure of surveying overseas ventures, which was left out of the CHIPS and Science Acts passed last month, could be revisited by Congress. This plan would have forced some strange guesses from U.S. companies to be vetted by a board of trustees from several government agencies to slow down technology transfer to China.

There has been an ongoing U.S. crackdown on Chinese companies’ access to chip-making technology for a couple of months now. Earlier this month, Reuters reported that the Biden group was considering inspecting memory chip shipments destined for China, including those destined for YMTC. The boycott is not yet officially in effect.

While contemplating an uncharted extension, Raimondo emphasized public safety several times just last week. Regarding the CHIPS Act, the business secretary stated, "We will execute the guardrails to guarantee the people who get CHIPS reserves can't think twice about security." This means that recipients of CHIPS funds "are not permitted to utilize this cash to invest resources into China; they are not permitted to foster leading-edge innovations in China... for 10 years.”

Russia and Ukraine are among the largest exporters of krypton, a gas required to manufacture chips, and the conflict in Ukraine has only exacerbated long-standing shortages in the chipmaking industry. In addition, consumers' restraint in spending on electronics like smartphones, computers, and tablets is a result of the expansion's increasing cost.