US said to plan new limits on tech sent to Chinese

Technology World

According to several people with knowledge of the situation, the Biden administration will likely announce new restrictions on Chinese companies access to high-performance computing technologies. This will be the latest in a line of actions meant to thwart Beijing’s plans to create next-generation weapons and automate massive surveillance systems.

The actions would be among the most substantial ones done by the Biden administration to deny China access to cutting-edge semiconductor technology. They might be disclosed as early as this week. They would expand upon a directive issued during the Trump administration that dealt a blow to the Chinese telecom giant Huawei by forbidding businesses from delivering its goods produced using American hardware, software, or technology.

According to two sources with knowledge of the plans, some Chinese businesses, government research laboratories, and other organisations are anticipated to suffer limitations similar to those placed on Huawei. In practice, any company that uses American-made technologies would be prohibited from doing business with the administration’s targeted Chinese firms. Which Chinese businesses and laboratories might be impacted is not yet known.

The extent of the so-called “foreign direct product regulation” increase is just one of the expected limits from Washington. The administration is also anticipated to make an effort to restrict the export of state-of-the-art American tools to China’s local semiconductor market.

According to the sources, Washington also intends to restrict the sale of microchips created in the United States to China’s most advanced supercomputing and data centre projects. Major academic institutions and internet companies like Alibaba and Tencent may find it difficult to obtain the components they require to construct cutting-edge data centres and supercomputers as a result of this restriction.

The cap could substantially impede China’s capacity to create the potent number-crunching technology that serves as the foundation for advancements in a variety of sectors, including biosciences, artificial intelligence, and missile engineering as supercomputer performance levels improve over time. Chip and tool import restrictions were previously reported by Reuters.

According to several people familiar with the discussions, the Biden administration has also been preparing an executive order that would enable the government to examine foreign investments made by U.S. companies for potential national security risks and consider other measures that might apply to Chinese memory-chip manufacturer Yangtze Memory Technologies Company, or YMTC.

The U.S. government is moving to separate American and Chinese supply chains on semiconductors and semiconductor technology, according to Orville Schell, a longtime China expert at the Asia Society, given their importance for not only national economies but also weapons systems and other military applications.

U.S. authorities have grown more anxious in the past one to two months about Chinese firms that produce midrange semiconductors rather than only the smallest, most cutting-edge technology, according to Schell. Officials do not want Chinese chipmakers to employ technology from the United States or other partner nations to build those chips since those older goods are still essential parts of weapons. Additionally, they oppose Chinese businesses from becoming major suppliers worldwide.

Regarding the proposed restrictions, the White House declined to comment. A spokesman for the Commerce Department’s Bureau of Industry and Security, which has control over the kinds of technology that businesses can export outside the country, said they were unable to confirm anything at this time.

If implemented, the sanctions will represent the United States’ most aggressive effort to date to attack China’s booming supercomputer and data centre business. Supercomputers with a variety of capabilities are used by numerous Chinese colleges, state-run businesses, and internet enterprises. Many are employed for crucial, if mundane, activities like administering social networks, forecasting the weather, and assessing traffic, but analysts and academics have demonstrated how others are employed for more selfish purposes.

Some supercomputers in China have been used to power intrusive monitoring programmes that target ethnic minorities. Beijing has used others to simulate nuclear explosions to create new weapons that could get past American defences.

For instance, in the western Chinese region of Xinjiang, where hundreds of thousands of minority Uyghurs have been imprisoned and monitored, video footage from the region’s numerous video cameras has been processed using a supercomputer powered by Intel and Nvidia CPUs. Nvidia and Intel both claimed they were not aware of what they referred to as the misuse of their technology. The widespread availability of potent microchips has thwarted recent efforts by the U.S. government to stop the transfer of technology to programmes like these.

Since many of these goods sold to China are produced elsewhere, the U.S. government’s conventional regulatory practices—which concentrate on goods exported from the United States—do not apply. Therefore, officials in the Trump and Biden administrations have started using the foreign direct product rule, a broad restriction that forbids the sale of goods produced anywhere in the globe using U.S. technology, equipment, or software to China. Even semiconductors produced abroad are frequently created with the aid of American hardware and software.

Some have criticised the Biden administration for moving slowly to restrict China’s access to cutting-edge American technology. People familiar with the conversations said that for many administration officials, China’s recent success in overcoming a significant technological barrier in semiconductor manufacturing highlighted the urgent need for more extensive supervision in the sector.

The Biden administration’s larger plan to starve China of essential technologies while investing heavily in American chip manufacturing facilities includes export restrictions. These actions are being taken as Beijing intensifies its hostility toward Taiwan, which manufactures the majority of the world’s advanced semiconductors.

Jake Sullivan, the national security adviser, said in remarks at the White House last month that while the US government has previously attempted to keep a few generations ahead of rivals in many crucial technologies, that strategy was no longer sufficient.

The Biden administration has touted the extensive use of export limits as a potent instrument to punish Russia for its invasion of Ukraine, claiming that doing so will permanently harm Russia’s defence, technology, energy, and other crucial industries. U.S. officials claim they can use the same instrument to resolve national security issues with other adversaries, including China.

The officials claim that in developing the limits on Russian enterprises, they used the Trump administration’s use of export restrictions intended at hindering Huawei as a model.

The Biden administration introduced new limitations on the export of select high-tech computer chips to China and Russia last month. These restrictions applied to expensive graphic processing unit (GPU) models sold by Silicon Valley firms like Nvidia and Advanced Micro Devices. The items, which were first designed to produce visuals in video games, are now essential for powerful computers that train artificial intelligence algorithms.