The United States has imposed new restrictions on AI chips and semiconductor equipment exports to China, blacklisting 140 Chinese entities while coordinating with allies to curb Beijing’s technological and military advancements. (Source: Image by RR)

140 Chinese Entities Blacklisted as Part of Sweeping Wave of U.S. Sanctions on Chips, Equipment

The United States has announced new restrictions targeting China’s access to advanced chips and AI technologies, a significant escalation in its efforts to curb Beijing’s technological ambitions while collaborating with key allies to balance global impacts. The Department of Commerce introduced controls on high-bandwidth memory (HBM) chips and expanded sanctions on semiconductor manufacturing equipment, including goods produced overseas with U.S. technology, marking an aggressive move to limit China’s semiconductor advancements critical to AI and military modernization.

The restrictions also blacklist 140 Chinese entities, focusing on firms aiding China’s self-sufficiency in semiconductor production, such as Huawei-linked suppliers and Dongfang Jingyuan, accused of intellectual property theft. While the measures restrict certain key players, they stopped short of including some Chinese firms initially considered, prompting a temporary rally among global semiconductor supply chain participants, particularly in Japan and the Netherlands. Exemptions for allied nations aim to ensure coordinated efforts and minimize disruptions to international partners.

China has strongly criticized the new measures, labeling them as economic coercion that jeopardizes global supply chains. Beijing has vowed to take countermeasures to protect its interests, accusing the U.S. of weaponizing national security concerns to unilaterally suppress Chinese technological advancements. Meanwhile, the Biden administration emphasized that the restrictions align with a broader strategy to impede China’s development of AI and advanced-node integrated circuits critical to its military and surveillance ambitions.

Despite the sharp restrictions, some exemptions exist, such as allowing Western firms to package HBM2 chips in China under low-risk conditions. The use of the Foreign Direct Product Rule (FDPR) ensures that even foreign-made products incorporating U.S. technology fall under the export controls, demonstrating the administration’s commitment to maintaining technological dominance. The measures reflect a calibrated approach to balancing national security with the need to maintain competitiveness in the global semiconductor industry while preparing for potentially more stringent policies under a new U.S. administration.

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