US unveils stricter semiconductor controls to prevent chips reaching China

The Biden administration is set to introduce new regulations aimed at preventing advanced semiconductors, particularly those produced by Taiwan Semiconductor Manufacturing Co. (TSMC), from reaching China.

These measures are part of a broader set of actions that the US government is rolling out in its final days in office.

The upcoming regulations will encourage chipmakers like TSMC, Samsung Electronics, and Intel to conduct more stringent customer vetting and due diligence, Caliber.Az reports citing foreign media sources.

This follows an incident where chips made by TSMC were illegally rerouted to the blacklisted Chinese firm Huawei Technologies.

Expected to be announced as early as Wednesday, these regulations will build on previous global semiconductor restrictions announced earlier this week. These curbs limit the sale of AI chips, such as those from Nvidia, to data centers in most countries.

The US is focused on eliminating channels through which Chinese companies, including Huawei, may still acquire cutting-edge chips. The new rules will target the world’s largest semiconductor producers, aiming to curb supply at the source.

Under the proposed rules, chips with a threshold of 14 or 16 nanometers and below would be presumed to be restricted under global controls, requiring a government license for sale to China and other covered nations. However, chipmakers could overcome this presumption by demonstrating that their chips are not intended for Chinese firms attempting to bypass US regulations.

The Commerce Department’s Bureau of Industry and Security, which manages semiconductor export controls, declined to comment on the matter.

The regulations are designed to help manufacturers identify which designs and customers fall under US trade restrictions, based on the power of processors. The sophistication of chips is determined by how many transistors — the microscopic switches that process information — are packed into each chip. Smaller nanometer measurements allow for more transistors, making the chips more advanced.

While the 14-16 nm threshold will encompass chips that are not as advanced as those governed by current trade restrictions, the draft rules would allow certain authorized customers to verify that their chip designs are not subject to US export controls. Similarly, chips with fewer than 30 billion transistors and packaged by a trusted company would also be exempt from these curbs.

These new measures are expected to target advanced processors, particularly AI accelerators designed by Chinese companies. The scope of the regulations appears to be broader than initially discussed with TSMC.

After TSMC chips were discovered in Huawei products, the US Commerce Department instructed the Taiwanese company to cease manufacturing chips at 7 nm or below for Chinese customers, according to sources familiar with the issue.

By Tamilla Hasanova