US seeks to curb China’s chip industry with new export rules

The President’s Government Joe Biden released a comprehensive set of controls to the exportswhich include measures to prevent China from accessing certain semiconductors made anywhere in the world with US tools, greatly deepening Washington’s attempt to curb technological advances and Beijing military.

The rules, some of which take effect immediately, build on restrictions sent in letters earlier this year to major toolmakers KLA Corp, Lam Research Corp and Applied Materials Inc, requiring them to stop shipments of equipment to wholly Chinese-owned factories producing advanced logic chips.

The set of measures could mark the biggest change in US policy on sending technology to China since the 1990s.

If effective, the measures could set China’s chipmaking industry back years by forcing US and foreign companies using US technology to cut support for some of China’s top chip factories and designers.

At a briefing, senior government officials said many of the rules are intended to prevent foreign companies from selling advanced chips to China or supplying Chinese companies with tools to make their own advanced chips.

However, they admitted that they have not yet obtained any promise that allied countries will apply similar measures and that discussions are being held with them.

“We recognize that the unilateral controls we are putting in place will lose effectiveness over time if other countries do not join us”said an official. “And we risk undermining America’s technology leadership if foreign competitors don’t submit to similar controls.”he added.

The expansion of US powers to control exports to China of chips made with US tools is based on an expansion of the so-called “foreign direct product rule.”