The United States is set to reinforce restrictions on China's access to advanced chips and related equipment, with the aim of preventing China from acquiring technologies that could bolster its military capabilities.
These measures intend to close existing trade restriction loopholes that were introduced in October of the previous year when the U.S. authorities curtailed the sale of artificial intelligence chips to China, which were manufactured using American technology.
The new measures include enhanced scrutiny of Chinese firms attempting to evade export constraints by routing their orders through other nations. To implement this, China-based chip developers will be added to the list of trade-restricted entities, compelling third-country manufacturers to obtain U.S. licenses when dealing with these Chinese companies. These updated restrictions are expected to be officially published this week.
This move by the Biden administration is part of a broader effort to tighten controls on the sale of graphic chips designed for artificial intelligence applications and advanced chip manufacturing equipment to Chinese firms. The news of these impending restrictions has already begun to affect Asian semiconductor manufacturers' stock values.
Back in August, President Joe Biden signed an executive order that limited U.S. investment in China's technology sector, including semiconductor and microelectronics development, quantum technologies, and artificial intelligence. Economists have dubbed this evolving tension as the "chip war," signaling the increasingly competitive landscape for technology and advanced manufacturing in the global arena.
These developments reflect the ongoing geopolitical and technological competition between the United States and China, impacting various industries, supply chains, and international trade dynamics. The U.S. is determined to maintain a competitive edge while safeguarding its national security interests, especially concerning advanced technologies that could have dual-use applications in both the civilian and military sectors. As a result, the semiconductor and artificial intelligence sectors remain focal points in this unfolding tech-oriented power struggle.
In response to these evolving U.S. policies and constraints, China has been pushing to accelerate its domestic semiconductor manufacturing capabilities, reduce its reliance on American technology, and bolster its self-sufficiency in critical areas of the semiconductor industry. Additionally, China has been emphasizing the development of core technologies related to artificial intelligence, quantum computing, and advanced microelectronics, all of which are considered vital for the nation's future competitiveness and security.
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