U.S. unveils new package of chip export controls against China

The United States on Monday announced a new semiconductor export control package against China, including curbs on high-end chips for artificial intelligence (AI) that are likely to affect the South Korean industry.

The Commerce Department’s Bureau of Industry and Security (BIS) unveiled the package on the Federal Register, involving restrictions on exports of high bandwidth memory (HBM) chips. Two South Korean firms — Samsung Electronics Co. and SK hynix — and Micron Technology lead the global HBM market.

The package comes as President Joe Biden is set to leave office on Jan. 20 with President-elect Donald Trump expected to adopt a tough policy stance on China. It is in line with Washington’s efforts to limit China’s access to key technologies on national security grounds.

“This action is the culmination of the Biden-Harris Administration’s targeted approach, in concert with our allies and partners, to impair the PRC’s ability to indigenize the production of advanced technologies that pose a risk to our national security,” Secretary of Commerce Gina Raimondo said. PRC stands for China’s official name, the People’s Republic of China.

For the latest package, the BIS applied Foreign Direct Product Rules, under which a product, produced in a foreign country, is also subject to restrictions if it is made using U.S. technology, software or equipment.

The HBM curbs — with a compliance date of Dec. 31 — target chips with a memory bandwidth density greater than 2 gigabytes per second per square millimeter, according to the BIS.

The curbs are expected to affect Samsung as it ships some of its HBM products to China, while little immediate impact is expected for SK hynix given that the company exports all of its HBM products to the United States, according to observers.

The BIS stressed the importance of curbs on HBM commodities for AI applications that it said can enable advanced military and intelligence applications, lower the barriers to entry for non-experts to
develop weapons of mass destruction, support offensive cyber operations and assist in using mass surveillance
to commit human rights abuses.

The Commerce Department also announced new controls on 24 types of semiconductor manufacturing equipment and three types of software tools for developing or producing semiconductors as well as 140 entities — linked to China’s military modernization — to its “Entity List.”