Biden bars China from advanced Nvidia chips as the US closes up policy loopholes
Salty tech battle… China’s chip supply is getting crushed like a bag of Lay’s stuffed in a backpack. On Tuesday the Biden admin announced new restrictions intended to restrict China’s access to American-made semiconductors that could be used in military tech. The US gov’t says the expanded policy isn’t meant to hurt China economically, and most chips that run smartphones, laptops, and other consumer tech will be unaffected.
Chip dip: Shares of US chipmakers including Nvidia, AMD, and Intel fell on the news.
Still hot: Nvidia said it didn’t expect the rules to have “a near-term meaningful impact” on its financials.
Workin’ around workarounds… The rules are meant to spackle cracks left by previous chip-export curbs. (Recall: President Biden intro’d sweeping restrictions on the Chinese semiconductor industry last year.) To prevent China from using other countries as US tech straw buyers, companies now have to get special licenses to export advanced chips to dozens of countries. Plus, some Nvidia-made chips allowed under the previous rules are now off limits to China. As are “chiplets” — the tiny puzzle-like pieces that can be combined for more power.
Chip-petitors: The fresh measures also limit US shipments to Biren and Moore Threads, both Chinese semiconductor startups founded by ex-Nvidia employees.
Crackin’ the whip could lead to whiplash… Measures intended to affect China’s chip industry could come back to bite US biz. Five years ago, China was the leading importer of American semiconductors. Now, as the US continues to cut back on trade with China, the US’s leading semiconductor trade group said there’s a risk of Uncle Sam’s policy doing more harm to the industry than it does good for national security.