US imposes restrictions on AI-chip shipments to China

The Biden administration unveiled a sweeping package of export-control measures aimed at banning shipments of advanced American chips to China, Reuters reports.

The new restrictions affect 28 Chinese firms. Chipmakers will now need to obtain an export licence. The U.S. government said that most applications would be denied.

The restrictions will apply to shipments of chips for supercomputers and for artificial-intelligence workloads. The sanctions will not affect consumer processors.

Experts say the United States has not imposed such restrictions on China since the 1990s. They are based on the Foreign Direct Product Rule, under which U.S. authorities can halt the sale of products created with American technology at any time.

If successful, the measures could stall China’s chip-design industry, say experts.

“This will push China back by years,” said tech and cybersecurity expert Jim Lewis.

According to a spokesperson for the U.S. government, the restrictions are intended to prevent foreign firms from selling advanced chips or tools for their production to China. However, they acknowledged that they had received no promises from allied countries regarding adopting similar measures.

“We understand that the unilateral control we are introducing will lose its effectiveness over time if other countries do not join us,” said one official.

Chinese authorities criticised the decision. The Ministry of Commerce said the restrictions damage trade and economic exchanges between producers in the two countries and threaten the stability of global supply chains.

“The United States must immediately stop the wrongdoing and deal fairly with companies around the world,” the ministry said.

Foreign Ministry spokesperson Mao Ning called the move an abuse aimed at strengthening the United States’ technological hegemony.

The announcement of anti-China sanctions обвалило shares of semiconductor-sector companies. TSMC shares fell 7%, the lowest since May 2021. Samsung Electronics’ stock fell 3.9%, and SK hynix down 3.5%. In total, the market capitalisation of semiconductor companies dropped by $240 billion.

Shares of Chinese chipmakers and tech giants also потеряли in price.

In September, the U.S. government restricted shipments of AI processors to China and Russia. Nvidia and AMD chips were banned.

In the same month, experts said that Chinese manufacturers would quickly create an alternative to American AI accelerators.

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