The rule would bar about half a dozen Chinese semiconductor fabrication factories at the centre of China’s most sophisticated chipmaking efforts from receiving exports from many countries. — Reuters
NEW YORK: President Joe Biden’s administration plans to unveil a new rule next month that will expand US powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers, two sources familiar with the rule say.
But shipments from allies that export key chip making equipment – including Japan, the Netherlands and South Korea – will be excluded, limiting the impact of the rule, said the sources who were not authorised to speak to media and declined to be identified.
As such, major chip equipment manufacturers such as ASML and Tokyo Electron will not be affected. Shares in both companies surged following the news.
The rule, an expansion of what is known as the foreign direct product rule, would bar about half a dozen Chinese semiconductor fabrication factories, or fabs, at the centre of China’s most sophisticated chipmaking efforts from receiving exports from many countries, according to one of the sources.
Places whose exports would be affected would include Israel, Taiwan, Singapore and Malaysia. Reuters could not determine which Chinese chip fabs would be impacted.
“The US Department of Commerce is continually assessing the evolving threat environment and updating our export controls, as necessary, to protect US national security and safeguard our technological ecosystem,” a department spokesperson said in a statement.
“We remain committed to working closely with our allies who share our values.”
Asked about the impending export control package, Chinese foreign ministry spokesperson Lin Jian said efforts by the United States to “coerce other countries into suppressing China’s semiconductor industry” undermine global trade and hurt all parties. Lin added that China hopes relevant countries would resist US efforts and safeguard their long-term interests.
“Containment and suppression cannot stop China’s development, but will only enhance China’s determination and ability to develop its scientific and technological self-reliance,” he said.
Aiming to impede supercomputing and artificial intelligence breakthroughs that could benefit the Chinese military, the United States imposed export controls on advanced chips and chipmaking equipment for China in 2022 and 2023, restricting shipments from California-based companies like Nvidia and Lam Research.
But Washington recognised that export controls agreed upon by several key countries were necessary. — Reuters
