Next month, the US administration plans to expand restrictions on shipments of semiconductors used in artificial intelligence and chip-making tools to China.
According to Arab Net, the Commerce Department intends to publish new regulations based on the restrictions sent in notified letters earlier this year to 3 US companies: KLA Corp, Lam Research Corp, and Applied Materials Inc.
This comes as the letters, which the companies have admitted, have banned the export of chip-making equipment to Chinese factories that produce advanced semiconductors with processes below 14 nanometers unless the sellers obtain licenses from the Ministry of Commerce.
The rules will also codify restrictions contained in Commerce Department letters sent to Nvidia Corp and AMD last month directing them to halt shipments of many AI computing chips to China unless they obtain licenses.
Some sources said that the regulations will likely include additional measures against China, while Reuters indicated that restrictions could also be changed and the rules published later than expected.
The so-called letters notified to the Department of Commerce allow to bypass the written rules, in the so-called moral effect on companies, as a kind of quick treatment of the controls, but the effect of the letters does not exceed the companies that receive them.
Turning the rhetoric into rules would expand their reach and could subject other US companies that produce similar technology to restrictions.
The regulations could apply to companies trying to challenge Nvidia and AMD's dominance in AI chips.
Intel Corp. and start-ups such as Cerebras Systems are targeting the same advanced computing markets.
Intel said it is closely monitoring the situation, while Cerebras declined to comment.
One source said the rules may also impose licensing requirements on shipments to China of products containing the targeted chips, as Dell Technologies, Hewlett Packard Enterprise and Super Micro Computer build data center servers that contain the Nvidia A100 chip.
A senior trade official declined to comment on the prospective measure, but said: As a general rule, we look to legalize any restrictions in letters of conduct with a regulatory change.
While a Commerce Department spokesperson on Friday declined to comment on specific regulations, he reiterated that it was taking a comprehensive approach to implementing additional measures to protect US national security and foreign policy interests, including preventing China from acquiring US technology.
Choking point
The planned action comes as the Biden administration has sought to stymie China's progress by targeting technologies, where the United States still maintains dominance.
The technology expert at the Center for Strategic and International Studies said: The strategy is to strangle China, and they've discovered that chips are a choke point. They can't make these things, they can't manufacture manufacturing equipment.
In an update on China-related measures last week, the Chamber of Commerce, a US business lobby, warned members of imminent restrictions on artificial intelligence chips and chipmaking tools.
We now hear that members should expect a series of rules or perhaps a blanket rule before the midterm elections to legalize the directive sent in the Commerce Department's reported and recent letters to chip manufacturers and chip design companies, the chamber said.
The group also added that the agency plans to add additional Chinese giant computing entities to the trade blacklist.
