US hits out at Chinese military with new chip export ban!

The US government just imposed sweeping restrictions on chip exports and chip manufacturing that target Chinese military capabilities!

US hits out at Chinese military with new chip export ban!

On Friday, October 7, 2022, the US government announced new regulations on computer chips and chip manufacturing technologies designed to target Chinese military capabilities.

The stated objective of these new export restrictions is “blocking the People's Liberation Army and China's domestic surveillance apparatus from accessing advanced computing capabilities that require the use of advanced semiconductors.“

According to US officials, these rules target not only the sale and export of chips, but also tools and software that could help the Chinese military in any way, including the development of weapons of mass destruction.

Unlike previous rules that targeted specific Chinese companies (such as HUAWEI), the new rules are much broader in scope and cover everything from chips manufactured by AMD and NVIDIAto complex and expensive hardware and software used to design and manufacture semiconductor chips.

These rules, some of which come into force immediatelybe based on existing restrictions that were previously applied to leading chip tool manufacturing companies in the US, such as KLA Corporation, Lam Research Corporation and Applied Material Incorporated.

It's not just advanced chips used for artificial intelligence computing and military or national security applications that are in the spotlight.

The new rules are more general, prohibiting U.S. companies from selling technologies to indigenous Chinese companies that enable the production of:

• DRAM chips of 18nm or less,
• NAND flash chips with 128 layers or more, and
• 14nm or smaller logic chips.

Even foreign companies operating in China are affected to some extent. American companies will have to obtain a license to export more advanced equipment to them.

But as a concession to South Korea, the US government will exempt SK Hynix and Samsung from these measures. The US companies will be able to continue supplying their production plants in China.

Many of the rules are aimed at preventing foreign companies from selling advanced chips or chip-making technologies and tools to China. However, the US government will have to “pressure” those countries to introduce similar measures.

Most of the most advanced chips are made in South Korea and Taiwan. If they continue to export to China, they will allow China to bypass US restrictions.

Read more : Biden to attack China with more chip restrictions!

Chinese government criticizes US ban on chip exports

The Chinese government on Saturday criticized the new U.S. ban on chip exports, calling it a violation of international economic and trade norms that will “isolate and backfire” on the United States.

Despite Mao's assurances that US actions will not halt China's progress, the new sweeping ban on chip exports and manufacturing will undoubtedly be damaging to China's semiconductor industry and set back its attempts at indigenous production by many years.

Moreover, this export ban will encourage China to redouble its efforts to develop its own chip manufacturing capabilities and possibly “hit back” by restricting rare earth exports to US companies.

Read more : Did China make 7nm chips despite US sanctions?

Overview of US chip export rules affecting Chinese companies

Below is a summary of the new restrictions that come into effect on Friday (October 7, 2022):

• Tools capable of producing logic chips made with FinFET field-effect transistors are banned from sale to China.
• Tools capable of manufacturing NAND flash storage chips with 128-layer or higher technology, and DRAM based on 18-nanometer half-pitch technology or smaller, are prohibited from being sold to China.
• Maintenance and repair of restricted tools is also prohibited, which would prevent advanced equipment from being kept in sufficient condition to continue producing quality chips in high volume.
• U.S. citizens currently servicing or supporting tools on the restricted list must cease their activities by Wednesday, October 12.
• Also banned is the export to China of items that China could use to make its own chip manufacturing tools, such as a light source for photolithography and other specialized components.

The U.S. Department of Commerce also issued these additional measures on Friday:

• 31 Chinese entities have been added to the Unverified List, which consists of companies that the U.S. government believes may divert technology they purchase from restricted entities.
• The Commerce Department has expanded the scope of its enforcement of the 28 Chinese companies already on the U.S. Entity List, including by allegedly denying them any licenses because of the risk that they would divert technology to the Chinese military.

Then, two weeks later, these restrictions will come into effect on Friday, October 21, 2022:

• Using a new Foreign Direct Products RuleThe United States will block any chips used in advanced computing and artificial intelligence applications.
• The foreign direct product rule can block chips made by non-U.S. companies (including Chinese chip designers) if they use U.S. technology or software.
• The new rule could force TSMC to stop producing advanced artificial intelligence or supercomputer chips designed by Chinese companies and manufactured in Taiwan unless it obtains an exemption.
• A new foreign direct product rule will apply to components and chips destined for supercomputers in China.

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