"US to Soon Strengthen Restrictions on Semiconductor Exports to China... Closing Loopholes" (Comprehensive)

"Export Restriction Measures Update Expected as Early as This Week"
Consideration of Including Fabless Companies as Targets
NVIDIA's China AI Semiconductor H800 Expected to Be Impacted

The U.S. administration under Joe Biden is expected to announce expanded measures as early as this week to block the export of low-performance AI semiconductors that domestic semiconductor companies have been indirectly selling to China.

On the 15th (local time), Bloomberg News and major foreign media outlets, citing multiple sources, reported that the Biden administration plans to update the semiconductor export restrictions to China, which were announced last October, within this month.

[Image source=Reuters Yonhap News]

Bloomberg reported that the Biden administration is seeking ways to strengthen controls over the sale of AI graphics semiconductors and advanced semiconductor manufacturing equipment to Chinese companies. The U.S. government is also said to be considering measures to prevent Chinese companies from circumventing export restrictions by importing through other countries not subject to these controls, as well as including Chinese fabless companies under the export restriction measures.

The core of this measure lies in improving the loopholes in the existing system. However, in response to industry requests, semiconductors for consumer products such as laptops are expected to be excluded from this export restriction, allowing sales within China.

The timing for the U.S. government's update on export restrictions is expected as early as this week, though delays remain possible.

If these restrictions are announced, NVIDIA is expected to be significantly impacted. NVIDIA currently sells AI semiconductors H800 and A800 to China. After the Biden administration announced export restrictions to China last October, NVIDIA released the H800 and A800 products, which have performance reduced by about 10-30% compared to the cutting-edge graphics processing units (GPUs) H100 and A100.

[Image source=Reuters Yonhap News]

Chinese tech companies, facing difficulties obtaining AI semiconductors due to U.S. sanctions, have recently competed to secure NVIDIA's H800 and A800. In particular, the H800, which has higher specifications than the A800, is used in the cloud computing divisions of Chinese tech companies such as Baidu, Alibaba, and Tencent. Consequently, Chinese companies have actively purchased these semiconductors despite soaring prices.

Major foreign media explained, "While U.S. government officials refused to specify exactly which semiconductors would be targeted, multiple sources revealed that NVIDIA's H800 is a semiconductor the Biden administration wants to block exports of."

Earlier, the Wall Street Journal (WSJ) reported in June that the Biden administration was preparing to prevent the export of "modified AI semiconductors" developed by exploiting gaps in the export restriction measures to China. WSJ explained that the existing measures made it difficult to block the use of U.S. AI semiconductors within China, prompting efforts to strengthen controls.

However, following concerns expressed by U.S. semiconductor companies including NVIDIA, Intel, and Qualcomm about plans to add further export restrictions to China, they have been persuading the administration to ease the severity and delay the timing of the measures. As a result, the announcement, initially expected in July or August, appears to have been postponed until October due to this process.

There were also reports that the Biden administration was preparing to restrict Chinese companies' access to cloud computing to protect advanced technology, but Bloomberg, citing sources, reported that this will not be included in the current measures.

The reason the Biden administration is strengthening semiconductor export restrictions to China despite appeals from the domestic semiconductor industry is to curb China's technological rise. Especially after Huawei, a leading Chinese tech company, released a smartphone in August containing advanced 7-nanometer (nm; 1 nm is one billionth of a meter) semiconductors, the U.S. government has shown its determination to intensify pressure.

Gregory Allen, director of the Wadhwani Center at the U.S. Center for Strategic and International Studies, stated in a report earlier this month, "Huawei's smartphone itself is not a major U.S. national security issue, but the semiconductors inside it are a U.S. national security issue," expressing concern that the Chinese military could leverage advanced semiconductor production capabilities.

This content was produced with the assistance of AI translation services.