US wants to cripple China’s chip industry with new, stringent regulations

• The Biden administration published a comprehensive set of export controls.
• One such measure barred China from obtaining certain semiconductor chips produced anywhere in the world using US tools.
• The package of sanctions may represent the biggest change in US policy.

The Biden administration published a comprehensive set of export controls on Friday, greatly extending its reach in an effort to halt Beijing’s technological and military advancements. One such measure barred China from obtaining certain semiconductor chips produced anywhere in the world using US tools.

The package of sanctions may represent the biggest change in US policy regarding technology transfers to China since the 1990s. If successful, they might cause some of China’s top manufacturers and chip designers to stop receiving backing from American and foreign companies that employ US technology, setting

China’s chip manufacturing industry back years.

Jim Lewis, a technology and cybersecurity expert at the Center for Strategic and International Studies (CSIS), a Washington, DC-based think tank, warned that the measures will put the Chinese back years and are reminiscent of the strict laws that prevailed during the height of the Cold War.

“China won’t give up on creating chips… however, this will considerably slow them down.

The regulations, some of which take effect right away, expand upon limitations outlined in letters top toolmakers KLA Corp, Lam Research Corp, and Applied Materials Inc. received earlier this year, effectively ordering them to stop shipping equipment to factories producing advanced logic chips that are wholly owned by China.

Senior government officials said many of the measures sought to restrict foreign corporations from selling advanced chips to China or providing Chinese firms with tools to develop their own advanced chips during a briefing with reporters on Thursday to preview the guidelines. However, they acknowledged that while talks with those countries are ongoing, they have not yet obtained any guarantees that they will take similar action.

We understand that if other nations don’t join us, the unilateral controls we’re enacting will gradually become less effective. And if international rivals are not subject to such rules, we risk undermining US technological leadership.

Impact potential is “very amazing.”

The enlargement of the so-called foreign direct product regulation is the foundation for the US’s increased ability to restrict the export of chips built with US equipment to China. Prior to stopping the supply of semiconductors to Russia after its invasion of Ukraine, it was earlier enlarged to allow the US government the power to oversee exports of chips created abroad to Chinese telecom giant Huawei Technologies Co Ltd.

China’s IFLYTEK, Dahua Technology, and Megvii Technology were put on the entity list in 2019 on charges that they assisted Beijing in the repression of its Uighur minority group. On Friday, the Biden administration imposed expanded restrictions on these companies.

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