news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

New Intelligence Report

Editor: Editorial Department

【New Wisdom Introduction】Next month, the US government may introduce new regulations to increase restrictions on Chinese chip companies' access to semiconductor manufacturing equipment.

The AI ​​"chip war" is intensifying!

According to Reuters, the US government is about to release expansion rules for the Foreign Direct Product Rule (FDPR) next month.

The new rules will further prevent countries and regions within the U.S. sphere of influence from exporting semiconductor manufacturing equipment to China.

Israel, Taiwan, Singapore and Malaysia would all be affected.

But key chipmaking equipment exporters such as Japan, the Netherlands and South Korea are not included.

Part of the reason is that "these countries will comply with their stricter export policies toward China, so the United States does not need to resort to the FDPR."

After the news was announced, the share prices of Dutch semiconductor manufacturing giant ASML and Japan's Tokyo Electron surged 11% and 7.4% respectively.

In addition, the United States also plans to clamp down on Korean companies such as SK Hynix and Samsung through FDPR to restrict China's access to high-performance HBM chips.

Those restrictions could come as soon as next month.

Lowering the minimum amount of US content

The FDPR gives the U.S. government the right to block sales of products, including those manufactured in foreign countries, if they are made using U.S. software or technology.

Current regulations determine whether a product falls within the scope of control based on the amount of U.S. technology it uses.

In the new regulations, the United States plans to lower the minimum limit of "US content", which means expanding the scope of regulated products. Sources said this fills a "loophole" in the FDPR.

Therefore, some devices may be subject to export controls simply because they contain chips containing US technology.

South Korea's SK Hynix and Samsung will be affected

South Korea's SK Hynix and Samsung are the world's top memory chip makers, and both use technology from U.S. companies such as AMAT and CDNS extensively, making them direct targets of FDPR.

Samsung HBM chip

According to Bloomberg, the United States is considering restricting China's access to AI memory chips and corresponding production facilities manufactured by Micron Technology and SK Hynix, which could be implemented as early as next month.

The measures are aimed at preventing Micron, South Korea's SK Hynix and Samsung from supplying Chinese companies with high-bandwidth memory (HBM) chips, which are crucial to running complex GenAI programs.

If implemented, the new rules would cover HBM2 and more advanced chips, including HBM3 and HBM3E, as well as the tools needed to produce them.

HBM chips are key components and are also key components of products from chip giants Nvidia and AMD.

Micron will reportedly be largely unaffected as they have already stopped exporting HBM products to China in 2023.

While the new measures will restrict direct sales of HBM chips to Chinese companies, it is unclear whether high-end memory chips would be allowed to be bundled with AI accelerators and sold to China.

6 wafer fabs and 120 entities may be restricted

The expanded FDPR will affect imports from about six of the country’s most advanced chip manufacturing centers, but it is not yet clear which manufacturers are included.

The United States also plans to add about 120 Chinese entities to its restricted trade list, including wafer fabs, tool manufacturers, EDA (electronic design automation) software developers, etc.

If a supplier wants to ship goods to these Chinese entities, they must first obtain a license issued by the US government, but the relevant application may not be approved.

Actively attract and cooperate closely

In order to prevent China's technological development in the chip field, the United States has issued export controls against China several times in the past few years, restricting shipments of California-based companies such as Nvidia and Lam Research.

In addition to controlling domestic companies, the United States is also committed to wooing other countries and regions to "encircle" China's AI and semiconductor industries.

Last year, the United States reached an agreement with Japan and the Netherlands to restrict the export of semiconductor manufacturing tools to China.

The United States then began persuading South Korea and Germany to join the alliance and tried to add more restrictions to the agreement.

James Lewis, a researcher at the Center for Strategic and International Studies in Washington, said, "The United States will not give up its pressure on Chinese technology. The exemptions obtained by Europe are temporary, and the same is true for other regions."

Although the planned new rules are still in draft form, they are expected to be released in some form next month, according to people familiar with the matter.

According to information from the U.S. Department of Commerce, in the U.S. export control system, all countries or regions are divided into five categories, A to E, based on factors such as diplomatic relations and security issues.

For example, D:5 includes mainland China; the A:5 and A:6 groups are countries and regions that maintain friendly relations with the United States.

In addition to Japan, the Netherlands and South Korea, the draft rules exempt more than 30 other countries and regions belonging to the same A:5 group.

References:

https://www.reuters.com/technology/new-us-rule-foreign-chip-equipment-exports-china-exempt-some-allies-sources-say-2024-07-31/

https://www.reuters.com/technology/artificial-intelligence/us-mulls-new-curbs-chinas-access-ai-memory-chips-bloomberg-news-says-2024-07-31/