U.S. Restricts Semiconductor Exports

The U.S. imposed new export restrictions on advanced semiconductors and chip-manufacturing equipment Friday in an effort to prevent American technology from advancing China’s military power, The Wall Street Journal reported.

The rules will require U.S. chip makers to obtain an license from the Commerce Department to export certain chips used in advanced artificial-intelligence calculations and supercomputing – crucial technologies for modern weapons systems, senior administration officials said.

According to The Wall Street Journal, the U.S. already requires licenses for exports of many advanced technologies to Chinese entities deemed to be working against U.S. national-security interests. Friday’s move expands that to include exports of crucial cutting-edge chips and equipment that can’t be obtained elsewhere. The rule will allow the U.S. to block foreign-made chips that are manufactured with U.S. technology, the officials said.

The restrictions are some of the broadest the U.S. has ever enacted against China’s chip industry, veering from previous actions that often targeted individual companies and a narrower subset of technology.

The New York Times reported that the Biden Administration on Friday announced sweeping new limits on the sale of semiconductor technology to China, a step aimed at crippling Beijing’s access to critical technologies that are needed from everything from supercomputing to guiding weapons.

According to The New York Times, the moves are the clearest sign yet that a dangerous standoff between the world’s two major superpowers is increasingly playing out in the technological sphere, with the United States trying to establish a stranglehold on advanced computing and semiconductor technology that is essential to China’s military and economic ambitions.

The New York Times also reported that companies will no longer be allowed to supply advanced computing chips, chip-making equipment and other products to China unless they receive a special license. Most of those licenses will be denied, though certain shipments to facilities operated by U.S. companies or allied countries will be evaluated case by case, a senior administration official said in a briefing Thursday.

The Verge reported that the decision follows months of increased investment by the U.S. in domestic and semiconductor manufacturing. In August, President Joe Biden signed the $280 billion CHIPS and Science Act, providing $52 billion in subsidies to boost companies choosing to build chip manufacturing plants in the U.S.

Overall, this seems like a good plan for the United States. It appears that the CHIPS bill is intended to encourage American companies to make chips here at home, while also making it harder for China to obtain chips made in the United States.