The US Commerce Department has introduced new chip restrictions to limit Chinese access to American semiconductors. Chipmakers will require a license to ship advanced semiconductors to regions under US arms embargoes.
The restrictions will not apply to chips used in consumer electronics like smartphones, laptops, and gaming devices. The rules are set to become effective in 30 days.
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The curbs are intended to thwart the advancement of China’s military might, especially in light of advancements in artificial intelligence (AI). The US fears advanced chips in Chinese hands could empower more devastating weapons and military strategies that threaten US national security.
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Companies must notify the government when exporting chips with speeds of more than 300 teraflops, devices capable of 300 trillion highly precise calculations per second. The government will allow the export of chips between 150 and 300 teraflops only if they can perform fewer than 370 billion calculations per square millimeter.
The new restrictions come after American companies had found ways to workaround export controls tabled by the Biden administration last year. US companies Nvidia, Intel, and Qualcomm have protested that the restrictions would hurt the revenues needed to build factories in the US.
For example, 20-25% of Nvidia’s data center revenue comes from China, which includes AI-focused chips like the A800 and H800 and other non-AI devices. These chips can be used to train AI models but are less powerful than their American counterparts.
Nvidia’s stock was down 7.5% after the US announcement but has s
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Author: David Thomas
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