In late March, the Biden administration released revised rules that will further tighten China’s access to U.S. artificial intelligence (AI) chips and chip-making tools. The U.S. imposed a series of export control measures first in October 2022 with the goal of restricting China’s access to advanced AI chips made with U.S. inputs. These measures were designed to constrain China’s efforts at military modernization and safeguard U.S. national security interests. A year later in October 2023, the U.S. Department of Commerce’s Bureau of Industry and Security came up with updated rules with the goal “to maintain the effectiveness of these controls, close loopholes, and ensure they remain durable.” The October 2023 rules were revised further on March 31, 2024. According to a Reuters report , the revised rules will come into effect within a week. The Commerce Department, which administers export controls, reportedly said that “it plans to continue updating its restrictions on technology shipments to China as it seeks to bolster and fine-tune the measures.” According to media reports , these revised rules will also affect laptops that contain these advanced chips. The revised rules come in against the backdrop of Commerce’s suspension of license of dozens of U.S. suppliers that sell chip-making materials and parts worth millions of dollars to China’s Semiconductor Manufacturing International Corp (SMIC). This step was taken after SMIC developed the new generation 7 nanometer (7nm) chips for Huawei. Meanwhile, various provincial governments in China are ramping up subsidies for chip manufacturing and both SMIC and Huawei appear to be gaining a lot from them. In Shanghai, 191 major projects are set to be subsidized, of which two are SMIC’s 300mm production lines, which are currently in the construction phase.
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