With a final salvo of new export measures for the chip industry, US President Joe Biden is saying goodbye to the White House this week. On Wednesday, the Bureau of Industry and Security (BIS), which oversees export regulations, published a new list of restrictions.
For example, the US wants to further slow down the development of the Chinese chip industry to prevent China from using advanced chips for the development of artificial intelligence.
BIS has dozens new names added to the expanding list of suspicious companies (entity list), which the US says are affiliated with the Chinese military. One of the newcomers is chip designer Sophgo, who had parts for AI chips made via the Taiwanese chip giant TSMC that ultimately ended up at Huawei. Huawei has been on the US banned list since 2019. Chipmakers such as TSMC and Samsung should better monitor who their ultimate customers are, according to the US.
The Americans are also introducing new restrictions on deliveries to factories that make so-called DRAM chips, the working memory found in normal computers or telephones. There have been restrictions on extra-fast memory chips for AI chips since December.
The Biden administration also added ten Chinese AI developers entity listbecause they would develop technology for military applications. This also includes Zhipu AI, whose chatbot Apple wanted to use for iPhones sold in China.
For the export of American AI chips, the Biden administration introduced a new export system earlier this week, in which only a select group of American allies are ‘allowed’ to purchase unlimited AI chips. This should prevent smuggling to Chinese and Russian data centers. Access to AI data centers of American companies will also soon be regulated. It attracted – quite rarely – open criticism from companies such as Nvidia and Oraclewho fear for their market position. The companies appear to be abandoning their trepidation now that the Biden administration is leaving.
Dutch update
Over the past two and a half years, the US has increased pressure on China’s chip industry. The first export restrictions were published in October 2022, which also affected chip machine manufacturer ASML. New restrictions followed in the autumn of 2023 and 2024, which have largely been adopted by the Netherlands.
On Tuesday, Foreign Trade Minister Reinette Klever (PVV) published another one update of the export restrictions, broadly a copy of the US measures taken a month ago. This affects the Chinese exports of chip machine makers AMSL and ASM International. ASML, which is more than ten times as large as ASM in terms of turnover (30 billion euros), had already taken into account that Chinese exports will decline this year. This is also because Chinese customers already saw the situation and ordered an excessive number of chip machines last year in order to avoid export restrictions.
The chip market is recovering with difficulty from a prolonged dip, but Taiwanese chip giant TSMC made a move on Wednesday positive quarterly results known. Turnover in the last three months of 2024 increased by almost 40 percent compared to the previous year. Three-quarters of TSMC’s revenue comes from advanced chips. “Decreasing demand for new phones is largely offset by a growing need for AI chips,” TSMC Chief Financial Officer Wendell Huang said in a statement.
It looks like the Taiwanese government will allow TSMC for the very latest generation of chips abroad, for example in factories in Arizona. This could be a compensation to the Trump administration, which believes that Taiwan should offer more in exchange for protecting the island against a possible Chinese invasion or blockade. Whether TSMC will move a larger part of its production is uncertain: producing chips in the US is much more expensive than in Taiwan and the technical talent is not there for the taking.
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