China expressed strong opposition to the latest U.S. chip export controls, with officials and experts saying that such curbs would further disrupt the global semiconductor industry chain and harm the interests of multinational corporations in the industry. On October 17, the U.S. government intensified restrictions on chip exports to China, broadening the controls by including slightly less powerful chips than those covered under the previous rules and expanded the previous list of manufacturing equipment. The U.S. Commerce Department included more Chinese chip companies, including Beijing Biren Technology Development Co and Moore Thread Intelligent Technology (Beijing) Co, on a trade blacklist. Biren said in a statement it strongly opposes the move and will actively appeal to relevant U.S. government departments. Moore Thread also said in a statement it strongly opposes the decision, and is actively communicating with all the parties concerned and evaluating the impact of the move.
The U.S. semiconductor industry has been strongly lobbying against the new rules due to fears of market uncertainty. The Semiconductor Industry Association (SIA), which represents 99% of the U.S. semiconductor industry by revenue, criticized the rules. “Overly broad, unilateral controls risk harming the U.S. semiconductor ecosystem without advancing national security as they encourage overseas customers to look elsewhere,” the group said. A spokesperson of China’s Ministry of Commerce (MOFCOM) said the United States constantly overstretches the concept of national security, abuses export control measures and resorts to unilateral bullying, which China is strongly dissatisfied with and firmly objects to. The U.S. should remove its controls on semiconductor exports to China without delay and create a fair, just and predictable business environment for enterprises of all countries, including Chinese enterprises, the Spokesperson said.
The U.S. has already adopted measures to contain Chinese technology companies. Apart from levying additional tariffs on a large number of Chinese products, it has included many Chinese market entities on its export control list, and imposed sanctions on Chinese enterprises. Such moves run against the interests of the U.S. semiconductor enterprises that have suffered huge losses; meanwhile, semiconductor enterprises in other countries have also been affected, Bai Ming, Deputy Director of International Market Research at the Chinese Academy of International Trade and Economic Cooperation said.
Following the announcement of the new rules, shares of leading chip companies such as Nvidia, Advanced Micro Devices and Intel all declined. Dutch chip manufacturing equipment provider ASML Holding said the latest U.S. regulations will be applicable to a limited number of factories on the Chinese mainland engaged in advanced semiconductor manufacturing. “These export control measures will likely have an impact on the regional split of our systems sales in the medium to long term,” ASML said, as reported by the China Daily.
The South China Morning Post adds that under the new rules Nvidia will be unable to export its A800 and H800 chips, which were designed to comply with earlier export rules. After Nvidia was banned from selling its state-of-the-art A100 and H100 chips to China under regulations Washington introduced a year ago, it tailor-made the A800 and H800 as alternatives for Chinese clients. The GPU ban will have a long-term impact on the industry, and in turn, will affect the capabilities of Chinese cloud service providers, said one source. Separately, Intel Corp, which launched a China-specific AI processor called Gaudi2, may not be allowed to export that product without a license under the updated export controls, hurting Chinese firms Inspur, New H3C and xFusion, which based their server products on Intel’s chips. A Beijing-based distributor of Nvidia products, who declined to be named given the sensitivity of the matter, said he was very concerned over whether there would be replacements for the A800 and H800.
