Biden Admin Unveils New Chip Restrictions on ‘Adversary’ China

The new rules will place additional limits on the types of advanced semiconductors that U.S. firms can sell to communist China.
Biden Admin Unveils New Chip Restrictions on ‘Adversary’ China
President Joe Biden looks at a quantum computer as he tours the IBM facility in Poughkeepsie, N.Y., on Oct. 6, 2022. IBM hosted the president to celebrate the announcement of a $20 billion investment in semiconductors, quantum computing, and other cutting-edge technology in New York state. (Mandel Ngan/AFP via Getty Images)
Andrew Thornebrooke
10/17/2023
Updated:
2/1/2024
0:00

The Biden administration is expanding its restrictions on semiconductor exports to China, seeking to slow the communist regime’s development of advanced military technologies.

The new rules will place additional limits on the types of advanced semiconductors that U.S. firms can sell to communist China, which the documents refer to as an “adversary” of the United States.

More U.S. companies will now be required to notify the government or obtain a license in order to export advanced semiconductor chips or the machinery needed to manufacture them, according to the Bureau of Industry and Security (BIS), a Commerce Department agency that oversees issues related to advanced technologies and national security.

“[China] seeks to use advanced computing [chips] and supercomputing capacity in the development and deployment of these [artificial intelligence (AI)] models to further its goal of surpassing the military capabilities of the United States and its allies,” one BIS statement reads.

According to another statement from the BIS, such a move is vital to preventing communist China and other hostile powers from disrupting global security and, in an apparent reference to Taiwan, from destabilizing regional stability.

“The use of such items in [the] development and deployment of advanced weapons systems and advanced AI to support military applications would further U.S. military adversaries’ goals of surpassing the United States and its allies in military capability, thereby destabilizing regional and global security status quos,” the statement reads.

US Looks to Limit China’s Military Advances

The BIS statements build on a report released earlier this year by the Office of the Director of National Intelligence that categorized China as one of several adversarial powers, alongside Iran, North Korea, and Russia.

The new rules thus seek to halt the flow of additional shipments of semiconductors to China, where the Chinese Communist Party (CCP) and its state-owned companies seek to use the technology to develop AI, hypersonic missiles, and surveillance technologies.

U.S. chipmakers will also be required to obtain licenses to export their products to several other nations in order to limit the possibility of exporting to China via third parties.

Security experts have long called for increased restrictions on such technologies to prevent the forced transfer of U.S. technologies to the CCP’s military wing.
Still, the expanded rules are unlikely to be without their detractors. Major tech firms maintain billions of dollars worth of ties to China and consider it a key market for growth.
The new rules will directly hamper some companies’ efforts to develop workarounds for previous restrictions.

Tech Companies May Balk at More China Regulations

When the Biden administration passed its first tranche of semiconductor restrictions in 2022, for example, tech company Nvidia created two new chips that it could sell to China instead.

Those chips, the A800 and H800, operated at slower speeds than previous chips but still allowed Chinese buyers to conduct advanced AI research. The new rules will restrict the export of those chips.

Companies such as Nvidia, Intel, and AMD, which have fostered ties to the CCP and its military, may buck under the added regulation.

A Nvidia spokesperson said the company complies with all “applicable regulations while working to provide products that support thousands of applications across many different industries.”

“Given the demand worldwide for our products, we don’t expect a near-term meaningful impact on our financial results,” the spokesperson said in an email to The Epoch Times.

The Semiconductor Industry Association, a lobbying group representing major chipmakers, said in a statement that it was evaluating the impact of the updated rules.

“We are evaluating the impact of the updated export controls on the U.S. semiconductor industry. We recognize the need to protect national security and believe maintaining a healthy U.S. semiconductor industry is an essential component to achieving that goal,” the statement reads.

“Overly broad, unilateral controls risk harming the U.S. semiconductor ecosystem without advancing national security as they encourage overseas customers to look elsewhere.”

This article was updated to include a statement from Nvidia. 
Andrew Thornebrooke is a national security correspondent for The Epoch Times covering China-related issues with a focus on defense, military affairs, and national security. He holds a master's in military history from Norwich University.
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