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USA sets restrictions on chip and AI factory equipment exports to China

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Last updated: September 12th, 2022 at 15:28 UTC+02:00

The U.S. Department of Commerce is planning to push new regulations under the Biden administration to impose additional export restrictions on AI and chipmaking tools to China. The Commerce Department has reportedly sent so-called “is informed” letters to a few USA companies to communicate the changes and set new restrictions.

The letters forbid the companies, including Lam Research Corp, KLA Corp, and Applied Maetirals Inc., from exporting sub-14nm chipmaking equipment to Chinese factories. Furthermore, the Department of Commerce also sent letters to AMD and NVIDIA, instructing them to halt shipments of several AI computing chips to China. (via Reuters)

The companies that have received the letters need to obtain Commerce Department licenses before they can continue exporting chips and AI-building technologies to China. The restrictions mentioned in the letters apply only to the companies that have received them. However, these letters are sent when changes need to happen on short notice and are usually followed by broader nationwide regulations.

More reasons for Samsung to worry about its supply infrastructure

Amidst all this, Samsung is trying to avoid becoming collateral damage in the US-China chip war. Last week, Samsung’s chip business leader, Kyung Kye-hyun, said that further restrictions could cause “[…] difficulties in the long run when we have to put new equipment into our factory in China.” The Samsung executive added that the company wants to find a win-win solution.

Seeing how the US Department of Commerce has now taken steps to restrict exports of chips and AI factory equipment to China, Samsung might not have much more to say on the matter. A spokesperson for the Commerce Department said that it is “taking a comprehensive approach to implement additional actions to protect U.S. national security and foreign policy interests.”

According to Jim Lewis, a technological expert at the Center of Strategic and International Studies, via Reuters: “The strategy is to choke off China and they have discovered that chips are a choke point.” In other words, while many chips are manufactured in China, chipset makers in China don’t have a way to acquire manufacturing equipment locally. The USA is now trying to capitalize on that vulnerability in its bid to strengthen local manufacturing and lower its dependency on China’s supply chain.

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