Explainer – Biden’s restrictions on chips destined for China are part of a larger effort


News of the letter to Nvidia, and a similar letter to rival AMD, follows the Commerce Department’s August announcement to restrict exports of materials and software used to make the next-generation chips. as well as a recent Reuters report on other proposed actions that would make it much more difficult for China’s semiconductor industry to compete globally.

The US advisory to chipmakers could cripple the ability of Chinese companies to perform advanced work like image recognition and hamper Nvidia’s business in the country.

Although a Commerce Department spokesperson didn’t shed much light on the letters in a statement, he suggested it was part of a larger effort aimed at China: “Although we are not able to introduce specific policy changes at this time, we take a comprehensive approach to implement additional necessary actions related to technologies, end uses and end users in order to protect the interests of national security and foreign policy of the United States.”

As in the past, the agency said it wanted to block China’s access to technologies that could be used “to fuel its military modernization efforts.”

Meanwhile, Commerce Secretary Gina Raimondo said the agency “pursues strategies such as ‘nearshoring’ and ‘friendshoring’, so that like-minded partners are integrated into our supply chains […]. As we rebuild our supply chains, we cannot be dependent on foreign countries that do not share our values ​​for our critical chip components.”

In a move interpreted as targeting China, the minister in August adopted new export controls on technologies that support the production of advanced semiconductors and gas turbine engines that the United States says are essential to their security. national.

The checks include ECAD, a class of software tools used to validate integrated circuits or printed circuit boards “which can advance many commercial as well as military applications, including defense and communications satellites.” , the department said at the time.

Soon after, Mr. Biden signed a bill to boost US competition with China’s science and technology efforts by subsidizing US chip manufacturing and increasing research funding. The law aims to “reduce dependence on vulnerable or overly concentrated foreign production, both for advanced microelectronics and for mature microelectronics.”

The United States is also considering limiting shipments of U.S. chipmaking equipment to memory chipmakers in China, including Yangtze Memory Technologies Co Ltd (YMTC), four people familiar with the matter told Reuters. part of the attempt to stop the advances of the Chinese semiconductor industry.

The crackdown, if approved, would ban the shipment of US chip-making equipment to factories in China that make advanced NAND chips.

Tensions between China and the United States over the tech sector escalated under Biden’s predecessor, Donald Trump, and have continued ever since. Reuters reported in July that Mr Biden’s administration was also considering imposing restrictions on shipments to China of tools to make advanced logic chips, seeking to cripple China’s largest chipmaker, SMIC.



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