US Tightens Export Restrictions On China, Plans To Continue Updating

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  • The U.S. has expanded the concept of national security and arbitrarily revised the rules~ China
  • The restrictions will be effective from April 4,2024. 
  • The US commerce department will continue updating the restrictions.

The US has tightened the regulations to make it more difficult for China to obtain U.S. artificial intelligence (AI) chips and chip making tools. This action is part of an effort to weaken Beijing’s chip making industry due to national security concerns. 

The new rules, spanning 166 pages, will be effective from April 4, 2024. They specify that the restrictions on chip shipments to China also cover laptops containing those chips.US import restrictions, initially released in October, aim to stop the shipment of more advanced AI chips, designed by Nvidia and others, to China as Washington intensifies its crackdown on Beijing’s advancing tech sector. 

The Commerce Department, responsible for overseeing export controls, stated its intention to continue updating its restrictions on technology shipments to China to strengthen and refine the measures.

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China has strongly criticised this, stating that they create more trade barriers and add uncertainty to the chip industry.  A spokesperson from China’s Commerce Ministry remarked that the U.S. has expanded the concept of national security and arbitrarily revised the rules, leading to more obstacles and a heavier compliance burden for Chinese and American companies. This, in turn, has generated significant uncertainty for the global semiconductor industry. 

The spokesperson also mentioned that the U.S. move severely affects the mutually beneficial cooperation between Chinese and foreign enterprises and harms their legitimate rights and interests. China has strongly opposed this action and is prepared to work with all parties for mutually beneficial cooperation and promote the security and stability of the global semiconductor industry and supply chain.

Artificial Intelligence Electronic Circuit. Microchip With Glowi
Image for representational purpose only

Recently, Advanced Micro Devices (AMD) faced a U.S. government roadblock in its efforts to sell an AI chip tailored for the Chinese market. AMD attempted to get approval from the U.S. Commerce Department, but officials stated that the chip was too powerful and required a license from the Bureau of Industry and Security. The chips are weaker than what the company sells outside China and designed to meet U.S. export restrictions. Further revisions to the curbs could subject its slower MI200 chips to licensing requirements, potentially barring their export to China.

The restrictions have also affected Nvidia’s China revenues, with the company experiencing a significant drop in its fiscal fourth quarter.  But, Nvidia has been offering samples of two new AI chips aimed at the China market as it seeks to maintain its market dominance and navigate the export restrictions. The company recently extended collaboration with Chinese EV makers with its Drive Thor chips.

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