US considering more regulations to limit China’s access to AI chips

In this post:

  • The US government is considering more restrictions on China’s access to new model chips for AI development.
  • Chip makers plan to launch GAA chips in the next year.
  • Manufacturers expect GAA chips to perform better and consume less energy.

The Biden administration is contemplating further restrictions on China’s access to semiconductor chip technology. This time, the focus is on the latest hardware that is only now becoming available in the market.

According to a Bloomberg report, the US government is making moves to limit Chinese access to the latest chip technology architecture in artificial intelligence, gate-all-around (GAA). These new regulations could slow down China’s progress toward assembling powerful computers capable of developing and operating AI models.

US is tightening AI chip export controls

Bloomberg reported that its sources said the US government is “determining the scope of a potential rule.” It is not yet known when the final decision on further restrictions will be made. Officials are still weighing the impact of any such rule.  

The unnamed sources said that the US wants to fence off the technology that is still in its development stages before it is launched commercially. The report also mentioned that the Biden administration has limited time before the upcoming presidential elections in November to introduce new rules. They still need to decide which technologies are important to focus on.

Also read: Chinese AI chip startups are reducing performance specs to secure TSMC access

The export controls are administered by the Commerce Department’s Bureau of Industry and Security (BIS), which has not revealed any information on the matter. However, sources told the publication that BIS had sent a draft GAA rule to a technical advisory committee. The committee has industry stakeholders on its panel, and it offers advice on technical parameters.

Washington wants to limit Beijing’s AI capability 

GAA technology has proved to make computer chips more powerful and has just been introduced by silicon chip manufacturers. GAA transistor architecture chips are generally considered to provide better performance with lower energy requirements. 

Industry professionals present at the committee reportedly criticized the first draft for being too broad. A source said that the restrictions may not be as strict as putting a complete ban on GAA chip exports, the focus will be more on the technology that is required to make them. 

The US government officials have said that they will take further measures to keep Beijing from getting the latest technology. The US  Commerce Secretary, Gina Raimondo, said in April in an interview with CBS News that,

“I hold businesses accountable as much as anyone when I tell them they can’t sell their semiconductors to China. They don’t love that, but I do that.”

As the rules are not yet finalized, it is also unknown how effective the restrictions would be in preventing China from developing its own GAA chips. The rule’s scope is still undetermined, so it can not be said that the rule will further restrict overseas manufacturers, especially US chip makers, from exporting their products to China.

The market responded to the report on export controls

Processor giant, Nvidia, along with companies like Advanced Micro Devices (AMD) and Intel, is planning to start mass production of GAA semiconductor chips in the next year with their manufacturing partners, such as Taiwan Semiconductor Manufacturing Corporation (TMSC) and Samsung Electronics. 

The market responded to the news as shares of AMD dropped 1.9% in New York on Tuesday following the Bloomberg report. Intel stock also decreased by 1%, while Nvidia fell by 2.5%. However, shares of Samsung Electronics and TSMC increased by 0.4% and 1.5% at the start of the Wednesday trading session, respectively. 

Also read: Huawei fills Nvidia gap in China by supplying locally produced AI chips

Last year, the US imposed a series of regulations to curb the exports of the latest chips and the tools used in manufacturing them to China. Later in the year, the Biden administration went a step further and halted the shipments of advanced processors from Nvidia. 

According to the report, US allies are also seeking their own export controls on GAA technology after a handshake agreement with the US during the recent talks. Washington is in a protracted battle with Beijing for AI chips, as the US started laying out measures in 2022. Washington considers AI chip supremacy an important factor in gaining an edge in artificial intelligence, as Raimondo said, “We have the most sophisticated semiconductors in the world. China doesn’t.”

Cryptopolitan reporting by Aamir Sheikh

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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