According to Washington, US businesses won’t be allowed to sell specific chips used in the development of supercomputing and artificial intelligence to Chinese businesses.
The limitations also aim to prevent exports from foreign businesses that make use of US machinery and technology.
According to a BBC investigation, the US and China are engaged in an arms race to control the semiconductor supply.
The new regulations will make it more challenging for China to acquire cutting-edge chips for cutting-edge technology.
Alan Stevens, the US Under Secretary of Commerce, made the announcement of the new restrictions against China, explaining that the intention is to make sure that the US does everything in its ability to prevent China from gaining “critical technologies with military applications.”
Beijing has blasted the restrictions after hearing in recent weeks that Washington intended to enforce them and has demanded that it stop treating Chinese companies unjustly.
On the basis of national security, the US previously prohibited the sale of technology to specific Chinese firms like Huawei.
However, these policies go well beyond that, with several aiming to stop Western firms from selling China advanced semiconductors or giving them the resources to produce advanced chips.
The restrictions would “put the Chinese back for years,” according to Jim Lewis, a technology and cybersecurity expert at the Center for Strategic and International Studies in Washington.
Asserting comparable limitations unilaterally would be ineffectual and might harm US companies’ market strength, according to US officials, who expressed their hope that other governments will follow suit.
Investors tentatively welcomed the measures since they were worried about how they would affect US chipmakers. For instance, Nvidia cautioned that the export limitations proposed by the US in August may lose them $400 million in sales.
The Semiconductor Industry Association, which represents chip makers, said it was studying the regulations. It urged the United States to implement the rules in a “targeted manner” and called for international cooperation to “help level the playing field”.
These measures come as the United States is pumping billions of dollars into the domestic chip industry, steps designed to boost US competitiveness. .
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