USA expands chip export controls

The USA is preparing to introduce a new rule next month to expand its powers in curbing exports of semiconductor manufacturing equipment to Chinese chipmakers.
There is image of semi-conductors showing flags of China and USA

The Biden administration is set to introduce a new rule expanding US powers to block exports of semiconductor manufacturing equipment to Chinese chipmakers. However, essential allies like Japan, the Netherlands, and South Korea will be exempt, minimising the rule’s overall impact. The additional restriction follows previous export controls aimed at hindering China’s advancements in supercomputing and AI for military purposes.

The new rule will extend the Foreign Direct Product rule, preventing several Chinese semiconductor factories from receiving equipment exports from countries such as Israel, Taiwan, Singapore, and Malaysia. The rule, which has previously targeted Huawei, allows the US to block sales of products made with American technology, even if produced abroad. The exemptions highlight a diplomatic effort to maintain international cooperation while enforcing export controls.

Additionally, the US plans to tighten regulations by reducing the threshold of US content in foreign products subject to export controls.

The rule, still in draft form, is expected to be finalised next month.

While ASML and Tokyo Electron shares surged in response to the exemptions, this development underscores the need for a balanced approach to managing export controls while maintaining solid international alliances.