US, Partners Issue New Tech Restrictions That Would Block China Access

A PsiQuantum Wafer manufactured via PsiQuantum's partnership with GlobalFoundries in Palo Alto, California, U.S., in March 2021. PsiQuantum/Handout via Reuters

The U.S. Commerce Department’s Bureau of Industry and Security (BIS) issued new controls on Sept. 5 to curb exports of sensitive technology out of national security concerns that the advanced technology could fall “in the wrong hands.”

“Aligning our controls on quantum and other advanced technologies makes it significantly more difficult for our adversaries to develop and deploy these technologies in ways that threaten our collective security,” stated Alan Estevez, under secretary for the Bureau of Industry and Security.

The new restrictions apply to quantum computing (such as quantum computers or software, or materials used to make these computers), advanced semiconductor manufacturing equipment, gate all-around field effect transistor technology (which develops chips used in supercomputers), and manufacturing materials used to produce metal or metal alloy components. These technologies all have military applications that “continue to emerge and evolve,” according to BIS.

Estevez and Assistant Secretary of Commerce for Export Administration Thea D. Rozman Kendler both said these controls are only effective with buy-in from other nations, which would prevent workarounds for adversary nations seeking to buy advanced technologies.

“The most effective way to protect our national security is to develop and coordinate our controls alongside like-minded partners, and today’s actions demonstrate our flexibility in how we craft such controls to achieve our national security objective,” Kendler stated.

Nations including Italy, the UK, Australia, Canada, France, Germany, Japan, and Spain have already received licenses that allow imports of these sensitive technologies from the United States.

The BIS in 2022 issued export controls on semiconductors and semiconductor manufacturing equipment to China, as well as updates to those controls in 2023, to “close loopholes” in the Chinese Communist Party’s ability to purchase and manufacture advanced military technologies.

U.S. officials said other countries would be announcing similar controls in the days to come.

On Sept. 6, the Dutch government announced it was expanding export restrictions on equipment used in advanced chipmaking because of security risks. Dutch company ASML is the world’s only producer of extreme ultraviolet lithography—a critical component to making the world’s most advanced chips. ASML has already been under controls that prohibit shipments to China since 2019.

The new rules are not an export ban but would mean that ASML will require government authorization to export outside the European Union, according to Minister for Foreign Trade and Development Reinette Klever.

“I’ve made this decision for reasons of security,” Klever said, according a translation by The Associated Press. “We see that technological advances have given rise to increased security risks associated with the export of this specific manufacturing equipment, especially in the current geopolitical context.”

ASML issued its own statement, saying the measures are not expected to have any impact on its financial outlook for 2024 or its longer-term scenarios.

Without international coordination, countries designated adversaries such as Russia and China find ways to obtain such equipment despite export controls or sanctions.

Despite ASML not selling to Russia, Russian firms got a hold of ASML spare parts through secondary markets in 2022 and 2023, Dutch newspaper Trouw reported on Thursday, citing Russian customs documents. The machines are older models, and purchased via China.

Reuters contributed to this report.