The US will impose more barriers to China’s access to advanced chip technology

Bloomberg – US President Joe Biden’s administration will seek to tighten sweeping measures announced in September to limit China’s access to advanced semiconductors and chipmaking equipment. It is an attempt by the US to prevent the Asian giant from developing technology that would create a military advantage.

The new rules are aimed at refining and closing loopholes in last year’s regulations, people familiar with the matter said. The Biden administration will add Chinese chip design companies to a list of trade restrictions that would force foreign manufacturers to obtain US licenses. The people said they would fill orders from those companies and tighten restrictions on sales of advanced chipmaking equipment and graphics chips to Chinese companies.

U.S. technology companies, from Nvidia Corp. to Applied Materials Inc., have lost hundreds of millions of dollars in orders since the initial restrictions were announced last year.. As China is the largest market for semiconductors, personal computers and smartphones, investors fear that rising trade tensions will further hurt the earnings of these US companies.

The administration will impose additional restrictions on Chinese companies that try to avoid country-specific restrictions by shifting shipping and manufacturing to other locations. Specifically, the rules will continue to restrict shipments of certain chips to branches and subsidiaries of Chinese companies overseas, and will require licenses to export restricted technologies to countries that may act as intermediaries.

The updated regulations will be released as early as this week, people familiar with the internal discussions said. A spokesman for the National Security Council declined to comment, while a spokesman for the Commerce Department’s Bureau of Industry and Security declined to comment.

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Last year’s restrictions were an aggressive move by the United States to curb China’s technological rise, as advanced chips — especially those with military applications — have become a key geopolitical battleground between Washington and Beijing. China has tightened regulations and accelerated investments to develop its own domestic capabilities.

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