US export controls on Chinese semiconductors force suppliers to cut ties


Western suppliers have begun cutting ties with some Chinese chipmakers in response to new US export controls, in another sign of the partial tech divorce the Biden administration has mandated to thwart China’s military development.

A major chip-making equipment supplier, ASML, has told US employees to stop installing or servicing equipment at any Chinese chip factory while it sorts out the new rules. Another equipment supplier, Applied Materials, said export restrictions would prevent it from achieving sales of about $400 million in the fourth quarter.

It’s common for Western companies to largely suspend exports in the immediate wake of new US restrictions, then resume later once they’ve figured out the rules, the lawyers say. But national security experts say the new restrictions are among the toughest the United States has yet adopted to cut off China.

“I view these export controls as extremely substantial. It goes directly to the heart of Beijing’s efforts to create a world-class domestic semiconductor industry,” said Martijn Rasser, senior fellow at the Center for a New American In particular, a new rule barring “American people” from supporting certain Chinese chipmakers “will not just freeze China’s capabilities in place, it will actually lead to degradation over time,” Security said. Shave.

US imposes strict rules to limit China’s access to high-tech chips

The export controls, announced Oct. 7, aim to slow China’s ability to produce its own high-end semiconductors, which often have dual uses in commercial and military technology. For now, China still lags behind Taiwan, South Korea and the United States in making the most high-tech chips.

The controls essentially prohibit exports to China of American-made manufacturing equipment needed to produce advanced chips. They also prohibit the export of any American tools or components to Chinese factories capable of manufacturing high-end semiconductors.

In a new step that appears to have prompted some companies to largely suspend trade with China, the rules also prohibit “American persons” – including American factories and Americans and American green card holders who work in foreign factories. overseas – to provide support without a license from the US government for the development or production of such chips for China.

ASML, a Dutch manufacturer of high-end semiconductor manufacturing tools that has offices in the United States and numerous American employees, immediately instructed its American staff to freeze interactions with Chinese customers.

“ASML US employees should refrain – directly or indirectly – from servicing, shipping or providing support to any customer in China until further notice, while ASML is actively evaluating which particular factories are affected by this restriction,” the company told employees in an internal. letter last week, an ASML spokesperson confirmed.

The company said the freeze applies to US citizens, green card holders and foreign nationals who live in the United States.

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