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U.S. Tightens Chip Export Controls on China, Restricts HBM Chips; China Retaliates, Calls Actions 'Economic Coercion'

Dec 3, 2024, 01:58 AM

The United States has announced new export restrictions targeting China's semiconductor industry in an effort to curb Beijing's technological advancements in artificial intelligence (AI) and military applications. The Biden administration revealed measures that tighten controls on China's access to advanced semiconductors, chip-making equipment, and AI technology. The U.S. added 136 Chinese entities, including major firms like Naura, Piotech, and Semiconductor Manufacturing International Corporation (SMIC), to the Entity List, effectively blacklisting them from accessing U.S. technology without a license. The new rules expand previous restrictions by blocking shipments of advanced chip-making tools, adding 24 new equipment items and three software tools to the export control list. They also specifically restrict exports of high-bandwidth memory (HBM) chips used in AI applications to China. The U.S. Department of Commerce stated that these actions aim to impair China's ability to produce advanced-node semiconductors that could be used in military equipment and AI systems. Commerce Secretary Gina Raimondo described the measures as "groundbreaking and sweeping." In response, China's Ministry of Commerce condemned the U.S. actions, calling them a violation of market principles and fair competition and labeling them as "economic coercion." China announced it would take measures to protect the legal rights of Chinese companies and has lodged solemn representations with the United States. Additionally, China announced enhanced export controls on dual-use items to the U.S., restricting exports of key semiconductor components and materials. Chinese industry associations, including the Internet Society of China and the China Semiconductor Industry Association, warned that U.S. chips are no longer safe or reliable and urged domestic companies to exercise caution in purchasing U.S. chips. They encouraged firms to expand cooperation with chip manufacturers from other countries and regions.