The United States Is Set to Hobble China’s Chip Industry With New Export Rules

by IS_Indust
United States

The United States Is Set to Hobble China’s Chip Industry

On Friday, the Biden administration issued a broad set of export controls, including a measure to bar China from purchasing certain semiconductor chips made anywhere in the world with United States equipment, vastly expanding its reach in an effort to slow Beijing’s technological and military advances.

The rules, some of which go into effect immediately, add to the restrictions imposed on top toolmakers KLA Corp (KLAC.O), Lam Research Corp (LRCX.O), and Applied Materials Inc (AMAT.O) earlier this year, effectively requiring them to halt shipments of equipment to wholly Chinese-owned factories producing advanced logic chips.

The slew of measures could represent the most significant shift in US policy toward shipping technology to China since the 1990s. If accomplished, they have the potential to obstruct China’s chip manufacturing industry by forcing American and foreign companies that use US technology to discontinue support for some of China’s leading factories and chip designers.

Jim Lewis, a technology and cybersecurity expert at the Center for Strategic and International Studies (CSIS), said, “This will set the Chinese back years.”

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