The United States on Monday announced a comprehensive set of restrictions targeting China’s semiconductor industry. The measures, introduced by the Commerce Department, aim to curb China’s advancements in chipmaking and artificial intelligence technologies by limiting access to critical tools, components, and partnerships. A total of 140 companies, including major players like Naura Technology Group, were added to the Entity List, effectively barring them from acquiring U.S. technology without special licenses.
New Export Controls on Chipmaking Tools
The restrictions include stringent controls on equipment essential for producing advanced-node integrated circuits. Tools for etching, deposition, lithography, and other processes will face heightened scrutiny. This move directly impacts companies like Lam Research, KLA Corporation, and Applied Materials, as well as non-U.S. firms like the Netherlands-based ASM International.
Software Tools Under Scrutiny
New rules also extend to software tools critical for developing advanced chips. The regulations encompass software that enhances the productivity of cutting-edge machinery or enables older machines to produce advanced chips. Siemens, through its subsidiary Mentor Graphics, could be among those affected.
Restrictions on Memory Components
The rules impose limits on high-bandwidth memory (HBM) used in AI chips, specifically targeting HBM 2 and higher technologies. Industry sources suggest Samsung Electronics may be particularly impacted, with around 20% of its HBM chip sales linked to China. High-bandwidth memory is a cornerstone of AI training and inference technologies, underscoring its strategic importance.
Expanded Entity List
The Commerce Department added 140 entities, including semiconductor fabs, tool manufacturers, and investment firms, to the Entity List. Notable additions include Wise Road Capital, Wingtech Technology, and JAC Capital. Export licenses for these companies are expected to face almost universal denial, further limiting their ability to procure U.S. technology.
Broader Foreign Direct Product Rule
The new rule expands U.S. jurisdiction over chipmaking equipment produced abroad using American technology. It affects equipment manufactured in countries such as Israel, South Korea, and Taiwan, though Japan and the Netherlands remain exempt. Additionally, the rule lowers the threshold for U.S. content required to trigger export restrictions, potentially curbing shipments of overseas items to China if they incorporate any U.S.-made chips.
This crackdown marks the third major U.S. initiative in three years aimed at restricting China’s access to advanced semiconductor technologies, citing national security concerns.