Biden Admin Tipped to Expand China Chip Export Restrictions

The Biden administration will further tighten already strict restrictions on the export of semiconductor manufacturing gear to China, Bloomberg reports(Opens in a new window). 

Citing people familiar with the situation, Bloomberg says the federal government has briefed US companies on the restrictions, which may double the number of machines that need special licenses for export.

The move to tighten restrictions is aimed at stopping China from growing its advanced chip industry and using chips in supercomputers that are capable of making nuclear weapons. 

Japan and the Netherlands, the two biggest producers of semiconductor chips outside the US, have also been working on restrictions in cooperation with the US. In January, a deal was brokered between the three countries that would see Japanese and Dutch companies refuse to sell “at least some” machines that are essential to chip manufacturing.

Dutch officials spelled out those restrictions this week, saying that the “most advanced” immersion lithography tools, which are critical for China’s chip-making ambitions, will be affected by export controls.

The agreement came after the Biden administration already imposed restrictions in October that require US companies to first apply for a license before exporting cutting-edge chip tech to China. That round of restrictions also limited US citizens from working in China and other countries that could pose a threat to national security.

Despite some concerns(Opens in a new window) about restrictions hitting sales and profits, US companies in the chip industry have not sought to soften or change them. In some cases, they’ve gone further to show their support. In January, PC maker Dell announced it would stop using chips from China in its products before the close of 2024.

In the face of tough restrictions, China has nonetheless found ways to obtain the chips. According to The Wall Street Journal(Opens in a new window), in the past two and a half years, China’s top nuclear weapons research agency was reported to have bought US-made semiconductor chips for use in nuclear weapons simulations via shell companies and back channels

The agency, China Academy of Engineering Physics, managed to obtain the chips from Intel and Nvidia despite being on a US export blacklist.