The Biden administration will tighten sweeping measures announced last October to restrict China’s access to advanced semiconductors and chipmaking gear, as the U.S. seeks to prevent its geopolitical rival from developing cutting-edge tech that could lend a military edge.
The new rules aim to refine and close loopholes from last year’s curbs, according to people familiar with the matter. The Biden administration will add Chinese chip design firms to a trade restriction list, forcing overseas manufacturers to gain a U.S. license to fill orders from those companies, as well as strengthen controls on selling advanced chipmaking equipment and graphics chips to Chinese firms, the people said.
U.S. technology companies ranging from Nvidia Corp. to Applied Materials Inc. have suffered hundreds of millions of dollars of lost orders since the initial restrictions were announced last year. Investors have expressed concern that escalations in the trade standoff will further weigh on revenue at those U.S. companies as China is the biggest market for semiconductors, personal computers and smartphones.
The administration will also impose additional checks on Chinese firms attempting to avoid country-specific restrictions by routing shipments and manufacturing elsewhere. Specifically, the rules will continue to restrict shipments of certain chips to Chinese companies’ overseas subsidiaries and affiliates, and begin requiring a license to export prohibited technologies to countries that could be used as intermediaries.
The updated restrictions will be published early this week, people familiar with the internal deliberations said. A spokesman for the National Security Council declined to comment, as did a spokeswoman for the Commerce Department’s Bureau of Industry and Security.
Last year’s curbs were an aggressive step by the U.S. to curtail China’s technological prowess, as advanced chips — particularly those with military applications — have become a key geopolitical battleground between Washington and Beijing. China has bristled at the restrictions and accelerated investments in building its own domestic capabilities.
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This story was originally published October 15, 2023, 7:39 PM.
