U.S. expands export powers to China

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U.S. expands export powers to China

The Biden administration has published a set of export controls including a measure to cut China off from certain semiconductor chips made in the world with U.S. tools, vastly expanding its reach in its bid to slow Beijing's technological and military advances.

The rules, which were put into effect earlier this year, rely on restrictions sent in letters to top toolmakers KLA Corp, Lam Research Corp and Applied Materials Inc, and require them to stop shipments of equipment to Chinese-owned factories producing advanced logic chips.

The raft of measures could be the biggest shift in U.S. policy toward shipping technology to China since the 1990s, and could set China's chip manufacturing industry back years by forcing American and foreign companies to cut off support for some of China's leading factories and chip designers.

Senior government officials said the rules were intended to prevent foreign companies from selling advanced chips to China or supplying Chinese firms with tools to make their own advanced chips. They conceded that they have not yet secured any promises that allied nations will implement similar measures and that discussions with those nations are ongoing.

One official said that the unilateral controls we're putting into place will lose effectiveness over time if other countries don't join us. We risk harming the U.S. technology leadership if foreign competitors are not subject to similar controls. The expansion of the U.S. power to control exports of chips made with U.S. tools is based on a broadening of the foreign direct product rule. It was previously expanded to give the U.S. government authority to control exports of chips made overseas to Chinese telecoms giant Huawei Technologies Co Ltd, and later to stop the flow of semiconductors to Russia after its invasion of Ukraine.

On Friday, the United States added China's top memory chip maker YMTC and 30 other Chinese entities to a list of companies that U.S. officials can't inspect, ratcheting up tensions with Beijing and taking aim at a firm that has troubled the Biden administration.

Companies that comply with the U.S. inspection rules can come off the list if they comply with the list, and could be a stepping stone to tougher economic blacklists. On Friday, U.S. officials removed nine such firms, including China's Wuxi Biologics, which makes ingredients for AstraZeneca's COVID 19 vaccine.

The new regulations will also restrict the export of U.S. equipment to Chinese memory chip makers and formalize letters sent to Nvidia Corp and Advanced Micro Devices Inc. AMD and Nvidia Corp and AMD will restrict the shipments of chips used in supercomputer systems that nations around the world rely on to develop nuclear weapons and other military technologies.