The Biden administration unveiled sweeping new export controls on Oct. 7 in an effort to hamstring the military modernization of an increasingly hostile China.
Among the new export rules is a measure that will cut communist China off from certain semiconductor chips that are made with U.S. technologies, regardless of whether the chips were manufactured in the United States.
The move is likely to be seen as a natural follow-up to the CHIPS and Science Act, which U.S. President Joe Biden signed into law in August. That law allocates billions of dollars in investments into the domestic manufacturing of advanced semiconductor chips.
“The United States has to lead the world in producing these advanced chips.”
Advanced semiconductor chips are used to make everything from pickup trucks to hypersonic missiles. Currently, more than 60 percent of the world’s supply of chips is produced in Taiwan, many of them with the help of U.S. research and design.
US Asserts Strength With New Rules
The move to cut off China from U.S. research and design presents a vast expansion of the White House’s efforts to retard the Chinese Communist Party’s (CCP) military modernization and associated technological advances in quantum computing and artificial intelligence.If effective, the new rules could set China’s domestic chip manufacturing industry back by years by compelling U.S. and foreign companies that use U.S. technologies to cut off support for China’s leading factories and chip designers.
The move is also likely to ameliorate previous fears about the CHIPS and Science Act over the issue of whether some companies might develop new chips with taxpayer money, then export their manufacture to China.
Senior government officials said in an Oct. 6 briefing that many of the rules sought to prevent foreign firms from selling advanced chips to China or supplying Chinese firms with tools to make their own advanced chips.
“We’re going to make sure that companies that take these taxpayers’ dollars do not turn around and make investments in China investments that undermine our supply chains and national security,” Biden said. “That’s a guarantee.
“The future of the chips industry is going to be made in America. The supply chain is going to start here and end here in the United States.”
Officials said they haven’t yet secured promises from allied nations to implement similar measures. Discussions to create a multinational effort toward that end were ongoing.
“We recognize that the unilateral controls we’re putting into place will lose effectiveness over time if other countries don’t join us,” one official said.
The expansion of U.S. powers to control chip exports to China is based on a broadening of the so-called foreign direct product rule. The rule was previously expanded to give the U.S. government the authority to control exports of chips made overseas to Chinese telecommunications giant Huawei.
The new regulations will also severely restrict the export of U.S. equipment to Chinese chip makers and effectively formalizes letters sent to Nvidia and AMD earlier in the year restricting shipments to China of chips required for supercomputing systems that could be used to develop nuclear weapons and other military technologies.
