The Biden administration published new export controls Friday designed to prevent China from access to chips made throughout the globe with US equipment.
The new rules require chip toolmakers KLA, LAM Research and Applied Materials to stop shipments to Chinese-owned fabs that produce advanced logic chips. All three companies saw their share prices drop on Friday by more than 4%.
The rules block shipments of a broad number of chips for use in Chinese supercomputers, with a supercomputer defined as a system with more than 100 petaflops of computing power on a floor space of 6,400 square feet. The regulations also restrict export of US equipment to Chinese memory chip makers.
Nvidia and AMD both had earlier been told by the US to restrict shipment to China of chips used in supercomputers that could be used by China and Russia to develop military technologies. Friday’s measures formalize those restrictions.
Even though the measures are considered sweeping by many, Nvidia issued a statement on Friday saying it was already subject to the controls. “We don’t expect the new controls, including restrictions for highly dense systems, to have a material impact on our business,” an Nvidia spokesperson told Fierce Electronics.
During the Trump administration, the US used the foreign direct product rule (FDPR) to control exports of chips made overseas to Huawei. On Friday, the Biden administration applied the same restriction to IFLYTEK, Dahua Technology and Megvii Technology which had been added to the entity list in 2019 over allegations they aided China in suppression of the Uyghurs in China.
Earlier Friday, the Biden administration added 31 companies and universities to a list of entities it cannot inspect. That group includes YMTC, China’s biggest memory chipmaker.
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The rules, to be posted to the Federal Register, run 139 pages and are formally described as an “interim final rule” with the Bureau of Industry and Security in the Commerce Department requesting comments.
“With this rule, BIS intends to limit the PRC’s ability to obtain semiconductor manufacturing capabilities to produce ICs packaged or unpackaged for uses that are contrary to US national security and foreign policy interests,” the document says.
The Semiconductor Industry Association said it is assessing the impact of the new export controls and will work with member companies and the US to ensure compliance.