In the latest chapter of the chip war between the United States and China, new restrictions will be placed next month on US shipments of semiconductor chips used for artificial intelligence and chipmaking equipment.
Previously in August, Washington began restricting the export of high-end graphics computer chips to Russia, China, and Hong Kong, including certain types of electronic design automation (EDA) software.
The new rules that prohibit the shipment of chipmaking equipment to Chinese factories that produce highly advanced semiconductors will be formalized by the US Commerce Department.
Washington is also looking to upgrade its ban on equipment exports to cover those needed for 14-nanometre processes, up from the existing ban covering 10-nm and below.
American companies that are exporting the chips and the equipment will have to obtain a license from the Commerce Department but companies such as KLA Corp., Lam Research Corp., and Applied Materials Inc. are already operating under the restrictions.
The manufacturing and usage of chips that power most electrical systems and machines, from appliances to computers, vehicles, and modern weapons, has been caught up in the tensions between China and the US, which seeks to reshore fabrication.
Previously in August, the Biden administration passed the Chips and Science Act, seeking to increase America’s competition with China in the semiconductor industry with $53 billion in funding for the domestic chip industry.
The new law will incentivize companies to build and expand fabrication capacity in the US, which is now responsible for just 12% of production though it was once responsible for producing 37 percent of global semiconductor chips.
A bill to boost US semiconductor production will subsidize computer chip manufacturers through grants and tax breaks when they build or expand chip plants in the country.
As it announced last week, the Commerce Department is planning to spend about $28 billion of the newly approved funding for grants, subsidies, and loans.
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