London Daily

Focus on the big picture.
Saturday, Jun 21, 2025

US aims to hobble China’s chip industry with sweeping new rules

US aims to hobble China’s chip industry with sweeping new rules

The host of measures could amount to the biggest shift in US policy on shipping technology to China since the 1990s and could set Chinese chip makers back by years.

The Biden administration on Friday published a sweeping set of export controls, including a measure to cut China off from certain semiconductor chips made anywhere in the world with US tools, vastly expanding its reach in its bid to slow Beijing’s technological and military advances.

The series of measures could amount to the biggest shift in US policy towards shipping technology to China since the 1990s. If effective, they could set China’s chip manufacturing industry back years by forcing American and foreign companies that use US technology to cut off support for some of China’s leading factories and chip designers.

“This will set the Chinese back years,” said Jim Lewis, a technology and cybersecurity expert at the Center for Strategic and International Studies (CSIS), a Washington DC-based think-tank, who said the policies harken back to the tough regulations of the height of the Cold War.

“China isn’t going to give up on chipmaking … but this will really slow them [down].”

The rules, some of which go into effect immediately, build on restrictions sent in letters earlier this year to top toolmakers KLA Corp, Lam Research Corp and Applied Materials Inc, effectively requiring them to halt shipments of equipment to wholly Chinese-owned factories producing advanced logic chips.

In a briefing with reporters on Thursday previewing the rules, senior government officials said many of the measures sought to prevent foreign firms from selling advanced chips to China or supplying Chinese firms with tools to make their own advanced chips. They conceded, however, that they have not yet secured any promises that allied nations will implement similar measures and that discussions with those nations are continuing.

“We recognise that the unilateral controls we’re putting into place will lose effectiveness over time if other countries don’t join us,” one official said. “And we risk harming US technology leadership if foreign competitors are not subject to similar controls.”


Potential impact ‘quite stunning’


The expansion of US powers to control exports to China of chips made with US tools is based on a broadening of the so-called foreign direct product rule. It was previously expanded to give the US government authority to control exports of chips made overseas to Chinese telecoms giant Huawei Technologies Co Ltd and later to stop the flow of semiconductors to Russia after its invasion of Ukraine.

On Friday, the Biden administration applied the expanded restrictions to China’s IFLYTEK, Dahua Technology, and Megvii Technology, companies added to the entity list in 2019 over allegations they aided Beijing in the suppression of its Uighur minority group.

The rules can hit the data centres of some of the Chinese tech giants


The rules published on Friday also block shipments of a broad array of chips for use in Chinese supercomputing systems. The rules define a supercomputer as any system with more than 100 petaflops of computing power within a floor space of 6,400sq feet (595sq metres), a definition that two industry sources said could also hit some commercial data centres at Chinese tech giants.

US Senate Democratic leader Chuck Schumer welcomed the announcement, arguing the rules would “protect our country’s innovations from China’s predatory actions”.

Eric Sayers, a defence policy expert at the American Enterprise Institute, said the move reflects a new bid by the Biden administration to contain China’s advances instead of simply seeking to level the playing field.

“The scope of the rule and potential impacts are quite stunning but the devil will, of course, be in the details of implementation,” he added.

The Semiconductor Industry Association, which represents chipmakers, said it was studying the regulations and urged the US to “implement the rules in a targeted way – and in collaboration with international partners – to help level the playing field”.


Ratcheting up tensions


Earlier on Friday, the US added China’s top memory chipmaker YMTC and 30 other Chinese entities to a list of companies that US officials cannot inspect, ratcheting up tensions with Beijing and taking aim at a firm that has long troubled the Biden administration.

The “unverified list” is a potential precursor to tougher economic blacklists, but companies that comply with US inspection rules can come off the list. On Friday, US officials removed nine such firms, including a unit of China’s Wuxi Biologics, which makes ingredients for AstraZeneca Plc’s COVID-19 vaccine.

The new regulations will also severely restrict the export of US equipment to Chinese memory chip makers and formalise letters sent to Nvidia Corp and Advanced Micro Devices Inc (AMD) restricting shipments to China of chips used in supercomputing systems that nations around the world rely on to develop nuclear weapons and other military technologies.

Reuters was the first to report key details of the new restrictions on memory chip makers, including a reprieve for foreign companies operating in China and the moves to broaden restrictions on shipments to China of technologies from KLA, Lam, Applied Materials, Nvidia and AMD.

Newsletter

Related Articles

0:00
0:00
Close
Political Turmoil Resurfaces in Belgium Amid Economic Concerns
Fed policymakers divided on timing of interest rate cuts
Trump signals imminent agreement with Harvard University
Inheritance tax referendum alarms Swiss billionaire community
Japan cancels bilateral security meeting amid US defence demands
AI skeptic Emily Bender warns that ‘the emperor has no clothes’
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
UK Home Secretary Apologizes Over Child Grooming Failures
Trump Organization Launches 5G Mobile Network and Golden Handset
Towcester Hosts 2025 English Greyhound Derby Amid Industry Scrutiny
Gary Oldman and David Beckham Knighted in King's Birthday Honours
Over 30,000 Lightning Strikes Recorded Across UK During Overnight Storms
Princess of Wales Returns to Public Duties at Trooping the Colour
Red Arrows Use Sustainable Fuel in Historic Trooping the Colour Flypast
Former Welsh First Minister Addresses Unionist Concerns Over Irish Language
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
France Bars Israeli Arms Companies from Paris Defense Expo
King Charles Leads Tribute to Air India Crash Victims at Trooping the Colour
Jack Pitchford Embarks on 200-Mile Walk to Support Stem Cell Charity
Surrey Hikers Take on Challenge of Climbing 11 Peaks in a Single Day
UK Deploys RAF Jets to Middle East Amid Israel-Iran Tensions
Two Skydivers Die in 'Tragic Accident' at Devon Airfield
Sainsbury's and Morrisons Accused of Displaying Prohibited Tobacco Ads
UK Launches National Inquiry into Grooming Gangs
Families Seek Closure After Air India Crash
Gold Emerges as Global Safe Haven Amid Uncertainty
Trump Reports $57 Million Earnings from Crypto Venture
Trump's Military Parade Sparks Concerns Over Authoritarianism
×