US bans AI chip exports to China, blacklists 140 companies

The United States has expanded its technological export restrictions on China, implementing new bans on artificial intelligence memory exports and adding 140 companies to its restricted list in a continued effort to limit China’s access to advanced technology.

Key policy changes: The Biden administration is implementing comprehensive new restrictions on technology exports to China, focusing on memory chips and manufacturing equipment critical for artificial intelligence development.

• The new rules, effective Monday, will restrict exports of high-bandwidth memory (HBM) and chip manufacturing equipment
• HBM, a sophisticated computer interface produced by Samsung, SK Hynix, and Micron, is particularly crucial for running generative AI models
• The restrictions extend beyond direct US-China trade, affecting multiple countries’ ability to export chip-making equipment to China

Target companies and scope: The expanded restrictions specifically target Chinese state-affiliated companies and those suspected of helping others evade existing regulations.

• Naura Technology Group, a partially state-owned enterprise, heads the list of newly restricted companies
• Chinese chip firms Piotech and SiCarrier face new restrictions, along with investment companies Wise Road Capital and Wingtech Technology
• Nearly two dozen semiconductor firms and over 100 chip production tool manufacturers are included in the ban

International impact: The new restrictions create a complex web of international compliance requirements, affecting multiple countries differently.

• Singapore, South Korea, Taiwan, Israel, and Malaysia are now barred from sending chip-making equipment to China
• Japan and the Netherlands have negotiated exemptions from certain aspects of the restrictions
• The rules affect global technology supply chains and international trade relationships in the semiconductor industry

Enforcement challenges: Previous attempts to restrict technology exports to China have faced various implementation hurdles.

• Reports indicate that some restricted companies may have already stockpiled technology in anticipation of the ban
• Evidence of existing chip-smuggling networks suggests ongoing challenges in enforcing export controls
• Some companies, like Huawei, have allegedly used shell companies to circumvent previous restrictions

Domestic investment context: While restricting exports, the US government is simultaneously investing in domestic semiconductor production.

• The Chips and Science Act has allocated billions in funding to companies including Samsung, Intel, Micron, and TSMC
• These investments aim to boost US chip production capabilities and reduce reliance on foreign manufacturing

Strategic implications: The effectiveness of these new restrictions may be limited by existing stockpiles and enforcement challenges, while the long-term impact on US-China technological competition remains uncertain.