Mon Dec 02 21:54:41 UTC 2024: ## US Unleashes Third Major Crackdown on China’s Chip Industry

**Washington D.C.** – The Biden administration on Monday launched its third major assault on China’s semiconductor industry in three years, imposing sweeping new export restrictions on over 140 Chinese companies. The move, described as a final large-scale effort before the incoming Trump administration, aims to cripple China’s ability to produce advanced chips crucial for military applications and artificial intelligence.

The new restrictions target a wide range of companies, including chip equipment makers Naura Technology Group, Piotech, ACM Research, and SiCarrier Technology, all added to the US Entity List. This effectively bars US suppliers from exporting to them without special licenses, which are rarely granted. The restrictions also encompass high-bandwidth memory (HBM) chips essential for AI, 24 additional chipmaking tools, and three software tools. The restrictions extend to equipment manufactured in allied countries such as Singapore and Malaysia, leveraging the Foreign Direct Product Rule. This rule will lower the threshold of US content needed to trigger export restrictions to zero, effectively controlling any item shipped to China from overseas that contains any US component.

The Commerce Department stated the action prevents China from advancing its domestic semiconductor industry and supporting military modernization. Commerce Secretary Gina Raimondo emphasized the importance of safeguarding US national security interests. The measures will likely impact US companies like Lam Research, KLA, and Applied Materials, as well as international firms including ASML. Three Chinese investment firms – Wise Road Capital, Wingtech Technology Co, and JAC Capital – were also added to the entity list for their role in aiding China’s acquisition of sensitive semiconductor technology.

China’s Ministry of Foreign Affairs condemned the actions as undermining international trade and disrupting global supply chains, vowing to protect its companies’ interests. The Ministry of Commerce labeled the restrictions “economic coercion” and “non-market practices.”

While China has made strides towards semiconductor self-sufficiency, it remains years behind industry leaders like Nvidia and ASML. This latest action builds upon previous export controls implemented in October 2022, marking a significant escalation in the US-China tech war. The impact on US allies, particularly those in the semiconductor manufacturing supply chain, remains to be seen, although the US has indicated it will offer exemptions to countries adopting similar export controls. The Dutch government announced it would be studying the implications of these new restrictions.

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