US plans to control export of US semiconductor technology to China

The Biden administration announced a dramatic expansion of controls on US semiconductor technology exports to China, making it ‘illegal’ for any US company to trade semiconductor chips with Chinese firms. The move comes as a pause to the Chinese technology sector and innovation ecosystem, as the Biden administration considers further advances in Chinese semiconductor technology against US national interests, Fletcher School professor Christopher Miller wrote in the Los Angeles Times. .

If we look at the past, several US administrators including Donald Trump tried to impose sanctions on the telecom equipment maker Huawei. Now, President Biden is taking on China’s entire computing industry. These limits are aimed at restricting the transfer of sophisticated graphics processing units, known as GPUs, a type of chip that is considered critical to running artificial intelligence applications in data centers.

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For a decade, the US has failed to stem the flow of computer technology to China’s military. Technologies such as missiles or radar are considered easier to limit when they have only military purposes, Miller said. The US has tried to block some Chinese companies with military ties from accessing advanced chips, allowing the technology to trade-oriented firms. But that policy clearly left a gap, after which the Biden administration exerted new control over not just specific Chinese companies, but the country as a whole.

Miller added that the reason the U.S. is skeptical about allowing the sale of the chips even for civilian purposes is because the U.S. has no control over where the chips end up once they go to China. But Miller says the US tech industry will also suffer from the sanctions.

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US citizens are often legally involved with Chinese chip companies, servicing their machines, selling them materials, or in some cases serving as CEOs. Now, Americans will face legal penalties for doing business with Chinese companies, just as they are allowed to do business with Iranian or North Korean companies.

Per Miller, US companies are also feeling the heat, as many stock prices fell after the US president’s announcement. Even if the company is able to gain revenue outside of China, the lost revenue will hurt them. Apart from that, American buyers of Chinese chips will also suffer and a prime example in this case is Apple Inc.

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Previously, Apple Inc. Yangtze Memory Technologies had planned to use chips from a Chinese government-backed company at subsidized prices, but now will have no choice but to buy chips from non-Chinese companies at market prices, Miller said. “However, apart from Silicon Valley, China is expected to take a big hit after the decision. It will take at least a decade for Chinese chip companies to develop advanced chipmaking capabilities at home,” she said.

The Biden administration’s new restrictions on China’s chip sector may finally succeed in closing the loophole, writes Christopher Miller in the LA Times. (ANI)

(This story has not been edited by DevDiscourse staff and is auto-generated from a syndicated feed.)

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