Explain the chip ban between the US and China

It has now been more than a month since the US Commerce Department issued new rules that restricted the export of certain advanced chips — which have military or artificial intelligence applications — to Chinese customers.

China has yet to respond — but Beijing has multiple options in its arsenal. Experts say it is unlikely that the US’s actions will be the last battle word in an industry that is becoming more geopolitically sensitive by the day.

This is not the first time the US government has restricted the flow of chips to its perceived adversaries. Previously, the United States she hasblocked Chip sales to individual Chinese customers. In response to Russia’s invasion of Ukraine earlier this year, the United States (along with several other countries, including South Korea and Taiwan) Developed Russia is under the chip ban.

But none of these previous US chip bans have been as widespread New laws, issued October 7. “This announcement is probably the biggest export control in decades,” he says. Sujay ShivakumarAnalyst at the Center for International and Strategic Studies in Washington.

The rules prohibit selling to Chinese customers advanced chips with high performance (at least 300 trillion operations per second, or 300 terabytes) and interconnection speed (generally, at least 600 gigabits per second). nvidia A 100, for comparison, is capable of over 600 terabytes and matches a connection speed of 600 Gb/s. Nvidia is even more impressive H100 It can reach nearly 4,000 trillion operations and 900 Gb/s. Both chips intended for data centers and AI trainers cannot be sold to Chinese customers under the new rules.

Additionally, the rules restrict the sale of manufacturing equipment if it will be intentionally used to make certain classes of advanced logic or memory chips. This includes logic chips produced at nodes of 16nm or less (which companies like Intel, Samsung, and TSMC have done since the early 2010s); NAND long-term memory integrated circuits with at least 128 layers (state of the art today); or DRAM ICs produced at 18 nm or less (which is what Samsung used started making in 2016).

Chinese chipmakers have barely scratched the surface of these numbers. SMIC Open 14 nm mass production this year, though counter Existing US sanctions. YMTC Charging has begun Last year’s 128-layer NAND chips.

The rules restrict not only US companies, but citizens and permanent residents as well. American employees of Chinese semiconductor companies He had to pack up. ASML, a Dutch maker of manufacturing equipment, Tell American employees should stop serving Chinese customers.

Speaking of Chinese customers, most of them – including offices, gamers and smaller chip designers – probably won’t feel the controls. “Most of the chip business and chip production in China has not been affected,” he says. Christopher Millera historian who teaches semiconductor business at Tufts University.

Instead, controlled types of chips are entering supercomputers and large data centers, and are desirable for training and running large machine learning models. Most of all, the United States hopes to prevent Beijing from using chips to strengthen its military – and perhaps preemptively Invade In Taiwan, where the vast majority of semiconductors and microprocessors in the world.

In order to prevent one potential bypass, the controls also apply to non-US companies that rely on US-made equipment or software. For example, Taiwanese or South Korean chip makers cannot sell Chinese customers advanced chips made with US-made technology.

It is possible to apply to the US government for an exemption from at least some of the restrictions. Taiwanese fab juggernaut TSMC and South Korean chipmaker SK Hynix, for example, have already gained Temporary exemptions – for a year. “What happens next is hard to predict,” he says. Patrick Schroeder, researcher at Chatham House in London. and the Department of Commerce already mentioned Such licenses would be the exception rather than the rule (despite Under Secretary of Commerce Alan Estevez I suggested About two-thirds of the licenses have been approved).

More export controls may be on the way. Estevez Shown That the government is considering placing restrictions on technologies in other sensitive areas – specifically Quantum information science And the Biotechnologyboth of which have seen researchers based in China make significant progress in the past decade.

The Chinese government has so far responded with Harsh words And a little work. “We don’t know if their response will be an immediate reaction or if they have a long-term approach to deal with this,” says Shivakumar. “It’s speculation at this point.”

Beijing can work with foreign companies whose revenues in the lucrative Chinese market are now under threat. “I’m not really aware of a specific company that you think would win in this,” says Shivakumar. This week, in the eastern Chinese city of Hefei government hosted Chipmakers conference attended by US companies AMD, Intel and Qualcomm.

nvidia has already responded By introducing a China-specific chip, the A800, which appears to be an A100 chip modified to meet the requirements. Analysts say Nvidia’s approach could serve as a model for other companies to maintain Chinese sales.

There may be other tools that the Chinese government could exploit. While China may depend on foreign semiconductors, foreign electronics manufacturers, in turn, depend on China for rare earth metals – and China supplies The vast majority of rare earth elements in the world.

There is precedent for China reducing its supply of rare earth elements for geopolitical leverage. In 2010, a Chinese fishing boat collided with two Japanese Coast Guard vessels, which led to an international incident when the boat’s captain was arrested by Japanese authorities. In response, the Chinese government to cut Rare earth exports to Japan for several months.

Certainly, much of the conversation focused on the US action and the Chinese reaction. But for third parties, the entire dispute provides a constant reminder of just how tense and volatile the chip supply can be. In the European Union, home to less than 10 percent of the world’s microchip market, the debate has fueled interest in the future European chip law, a plan to invest heavily in manufacturing in Europe. “For Europe in particular, it’s important not to get bogged down in this trade issue between the US and China,” says Schroeder.

“The way the semiconductor industry has developed over the past few decades has been based on a relatively stable geopolitical system,” says Shivakumar. “It is clear that the facts on the ground have changed.”

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