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U.S. Works to Restrict Chip Exports to China

The Biden administration is planning to implement new restrictions on exports of semiconductors and the machines that produce them to prevent China from accessing some of the most cutting-edge technology, according to The Wall Street Journal (subscription).

The background: “The administration in recent weeks has already placed new restrictions on some U.S. exports of chips used for artificial-intelligence calculations and manufacturing equipment used to make some of the most powerful number-crunching chips.”

The approach: New export controls could focus on a variety of additional areas, including high-end memory-chip manufacturing, leading-edge chipmaking tools and advanced quantum computing. The United States could also add additional Chinese companies to the Commerce Department’s “entity list,” which would prevent U.S. companies from exporting goods to them without a license.

The alliance: The United States has been in conversation with other trading partners in an effort to make a broad international push for more effective export controls. By applying controls in partnership with countries like Japan, South Korea and European nations that supply much of the necessary products and software for advanced chipmaking, the United States could limit China’s chip industry significantly going forward.

The home front: “As it places more restrictions on China, the Commerce Department is preparing to roll out tax breaks, factory-building grants and research funding to try to bring more of the semiconductor industry back to the U.S. The funding, worth nearly $77 billion in total, was passed by Congress in July and signed by President Biden in August.”

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