US Increases Restrictions On Semiconductor Supply To China

In an effort to impede China's military advancements, the United States US is introducing additional steps to prohibit shipments of computer chip technology to that nation. The US announced new regulations that would prohibit US companies from supplying Chinese corporations with certain processors needed for supercomputing and artificial intelligence.

The limitations also target purchases made by foreign businesses using US-made equipment. With China, the US is in an arms race for control of the semiconductor supply. The broad new regulations will make it more difficult for China to acquire sophisticated chips for cutting-edge technologies.

The guidelines were issued by US Commerce Department Undersecretary Alan Estevez, who stated that his goal was to make sure the US was doing everything it could to stop China from acquiring "critical technologies with military applications."

We are upgrading our policies today to ensure that we are addressing the problems because the threat landscape is constantly changing, he said.

Beijing has criticized the measures and demanded that the US stop treating Chinese companies unjustly as soon as word of the preparations for fresh restrictions became public in recent weeks.

On the basis of national security, the US has already prohibited technology sales to some Chinese corporations, including Huawei.

Despite admitting that without international collaboration, the regulations would become ineffective and may harm the competitiveness of US corporations, US officials expressed their hope that other governments would join them in enacting similar limitations.

Investors' reactions to the guidelines have been mixed due to their potential effects on US chipmakers. For instance, Nvidia has previously informed investors that it may lose $400 million in sales as a result of the export limits the US announced in August.

The association that represents chipmakers, the Semiconductor Industry Association, stated that it was reviewing the rules. It asked for international cooperation to  "help level the playing field" and urged the United States to apply the regulations "in a targeted way"