US Government Likely To Restrict AI Chip Exports to China

The tech war between the U.S. and China is about to heat up. The U.S. government is considering measures that will keep AI memory chips and the equipment to make them out of the hands of Chinese companies. The rules could go into effect as early as next month, according to Bloomberg.

The new rules will prevent manufacturers SK Hynix Inc., Micron Technology, and Samsung Electronics from supplying high bandwidth memory (HBM) chips to China. Specifically being limited are HBM2 chips as well as the more advanced HBM3 and HBM3E chips, which are essential for complex artificial intelligence programs and AI accelerators like those made by NVIDIA Corp.

“The U.S. Department of Commerce is continually assessing the evolving threat environment and updating our export controls, as necessary, to protect U.S. national security and safeguard our technological ecosystem,” stated a department spokesperson, per Reuters. 

Since Samsung and SK Hynix are based in South Korea, it’s unclear how the U.S. government plans to enforce the ban. However, both companies use chip design software and equipment from the U.S., so it is speculated that the government could implement the Foreign Direct Product Rule (FDPR). Under the FDPR, the U.S. can place certain conditions on foreign products when manufactured using American technology.

Micron Technology, based in Boise, Idaho, won’t feel the effects of the measure. When the Chinese government banned its memory chips in 2023, Micron stopped exporting HBM products to China.

“Containment and suppression cannot stop China’s development, but will only enhance China’s determination and ability to develop its scientific and technological self-reliance,” said Chinese foreign ministry spokesperson Lin Jian, according to Reuters.

China recently invested over $47 billion toward the development of chip technology within the country. Through the China Integrated Circuit Industry Investment Fund, known simply as the “Big Fund,” the money will be used to advance China’s agenda to become the world’s leader in semiconductors.

If and when the new U.S. rules come out, it’s likely more than 120 Chinese companies will be affected. Included in the measure are new sanctions that limit chip-manufacturing equipment. No word yet on what these limitations could be.