The United States is launching its third major action in three years against China’s semiconductor industry, imposing export restrictions on 140 companies. An exception appears to be coming for the Netherlands.
The restrictions affect chip equipment manufacturer Naura Technology Group, among others. They also include measures aimed at Chinese chip equipment manufacturers such as Piotech and SiCarrier Technology. According to Reuters, two insiders stated that the package of measures additionally restricts exports of advanced memory chips and other chip manufacturing tools to China.
Trump continues line Biden
The move is one of the last significant attempts by the Biden administration to block China’s access to and production of chips that could contribute to military applications. Or that could threaten U.S. national security. It comes just weeks before people re-sworn Donald Trump as president. He is expected to continue many of Biden’s tough measures against China.
The package includes restrictions on China-bound supplies of high-bandwidth memory (HBM) chips, which are essential for applications such as AI training. This is in addition to new restrictions on 24 additional chip manufacturing tools and three software tools. There will also be a new restriction on exports of chip manufacturing equipment from countries such as Singapore and Malaysia.
These measures are likely to affect U.S. companies such as Lam Research, KLA, and Applied Materials, as well as non-U.S. companies such as Dutch company ASM International. Among the Chinese companies facing new restrictions are nearly two dozen semiconductor companies, two investment companies, and over 100 chip manufacturing tool manufacturers.
Cooperation with Huawei
According to US lawmakers, some of these companies are cooperating with Huawei Technologies, previously affected by US sanctions. The affected companies will be added to the “entity list,” meaning U.S. suppliers will need special licenses to supply to them.
Chinese Foreign Minister Lin Jian criticized the U.S. restrictions, accusing the U.S. of undermining the international economic order and disrupting global supply chains.
China wants to be self-sufficient
China has stepped up efforts in recent years to become self-sufficient in the semiconductor sector but still lags behind world leaders such as Nvidia (AI chips) and ASML (chip manufacturing tools). The US is also considering stricter measures against Semiconductor Manufacturing International, China’s largest contract chip manufacturer, on the Entity List since 2020.
Two companies that invest in chips, Wise Road Capital and Wingtech Technology, have also been added to the list for the first time. License applications to supply companies on the list are usually rejected.
Exceptions for the Netherlands and Japan
A new aspect of the measures may limit equipment exports by Japanese and Dutch manufacturers unless these countries introduce similar controls. However, Dutch and Japanese companies are given an exception compared to manufacturers from other countries such as South Korea, Taiwan and Israel.
The new rules also restrict memory technology (HBM2 and above) in AI chips, likely affecting Samsung, SK Hynix and Micron. Analysts estimate that Samsung generates about 30% of its HBM chip sales in China.
This package is the third major initiative by the Biden administration to restrict exports of chip-related technologies to China, following previous major moves in October 2022.