The Biden Administration remains strong in its plans to block chip sales to China.
- Recently, the U.S. government put restrictions on sending chips to China.
- The U.S. restricted chip sales by Nvidia and Advanced Micro Devices to China and Russia—”to keep advanced technologies out of the wrong hands,” the Department of Commerce statement says.
- Now, The Biden Administration plans to broaden curbs on U.S shipments to China of semiconductors used for artificial intelligence and chip making tools next month, according to Reuters.
- The Commerce Department is planning to publish new regulations based on the previous restrictions communicated to U.S. chipmakers blocking the sale of chips to China without a special license.
- The new rules will also codify restrictions recently imposed on Nvidia and Advanced Micro Devices, according to Reuters. The US could further place license requirements on shipments to China of products that contain the targeted chips.
- After the initial letter sent to companies to block the sales, Nvidia stock prices dropped 13.4% and Advanced Micro Devices dropped 8.3%.
Why it’s important
“Without American chips from companies like Nvidia and AMD, Chinese organizations will be unable to cost-effectively carry out the kind of advanced computing used for image and speech recognition, among many other tasks,” reports Reuters.
The Commerce Department is reviewing the policies, but has not announced specific changes as of now.
Chinese chip distribution has been a big topic of discussion in the U.S. for a long time and the time has officially come where the U.S. is trying to ban the country’s access.
The U.S. banned the sale of chips of 14 nanometers or better to China without a license. The original limit was 10 nanometers, but by raising it to 14 it now covers more types of chips under this rule.
The reason for banning the chips is to stop China from using them for military use against the U.S.
“While we are not in a position to outline specific policy changes at this time, we are taking a comprehensive approach to implement additional actions necessary related to technologies, end-uses, and end-users to protect U.S. national security and foreign policy interests,” a spokesman tells Reuters.
If China loses access to these chips it halts their ability to affordably carry out computing for image and speech recognition.
Image recognition and natural language processing are common in consumer applications like smartphones that can answer queries and tag photos. They also have military uses such as scouring satellite imagery for weapons or bases and filtering digital communications for intelligence-gathering purposes, says Reuters.