The Biden administration is preparing to introduce new regulations aimed at tightening the flow of advanced chips to China, with a particular focus on manufacturers such as Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung Electronics, and Intel, Bloomberg reports.
The new rules, expected to be unveiled as soon as Wednesday, are designed to enhance due diligence among chipmakers and prevent sensitive technology from being diverted to blacklisted Chinese companies, particularly in light of a recent incident involving TSMC and Huawei Technologies.
The new regulations come on the heels of a broader set of semiconductor export restrictions introduced earlier this week. These curbs limit the sale of artificial intelligence (AI) chips by major producers like Nvidia to data centers in certain countries. The goal of the latest measures is to ensure that advanced chips are not reaching Chinese customers that could potentially use them in ways that circumvent existing US trade restrictions.
The regulations would require chipmakers to more carefully vet their customers. Under the draft rules, chips with a production threshold of 14 to 16 nanometers and below would be considered restricted, and their sale to China and other affected countries would require a government license. While the new guidelines would add another layer of scrutiny to the sale of such chips, there are provisions that allow chipmakers to seek exemptions. For instance, if a chipmaker can demonstrate that a particular design does not fall under US export controls, it may be able to bypass the restrictions.
The issue of restricted chip sales gained prominence following the discovery that TSMC-made chips had been secretly diverted to Huawei, a Chinese company blacklisted by the US government. This incident led to a crackdown on the practice and prompted the Commerce Department to take action against TSMC, instructing the company to cease the production of chips at a 7-nanometer threshold for Chinese customers.
The proposed regulations are seen as part of a broader US strategy to limit China’s access to advanced semiconductor technologies, which are critical for a variety of sectors, including AI and defense. The US government has raised concerns that Chinese firms, including Huawei, could use sophisticated chips for military and surveillance purposes, which would give them a strategic advantage.
The new rules would target more advanced processors, particularly AI accelerators, designed by Chinese companies. However, the guidelines are still broader than initially anticipated, capturing chips that were previously not subject to the most stringent controls. According to people familiar with the matter, the regulations would create a presumption that chips with fewer than 30 billion transistors, or those packaged by approved companies, would not be considered “advanced” and therefore exempt from the curbs.
