Biden to hit China with broader restrictions on US tool and chip exports

President Biden’s administration plans next month to expand restrictions on US shipments to China of semiconductors used for artificial intelligence (AI) and chipmaking tools, sources said.

The US Commerce Department intends to publish new regulations based on restrictions communicated in letters earlier in 2022 to three US firms—KLS Corp, Applied Materials Inc, and Lam Research Corp, sources said.

The letters, which the firms publicly acknowledged, forbade them from exporting chipmaking equipment to Chinese factories that manufacture advanced semiconductors with sub-14 nanometer processes unless the sellers obtain Commerce Department licenses.

The rules would also codify curbs in Commerce Department letters sent to Nvidia Corp and Advanced Micro Devices (AMD) in August 2022, instructing them to stop shipments of several AI computing chips to China unless they obtain similar export licenses from the department.

The informal letters allowed the US Commerce Department to bypass lengthy rule-writing processes to put controls in place quickly, but the letters only apply to the firms that have received them.

Changing the letters into rules would widen their reach and could subject other US firms producing similar technology to the restrictions. The regulations could potentially apply to companies trying to challenge AMD’s and Nvidia’s dominance in artificial intelligence chips.