American regulators have introduced new rules to tighten export control measures on chips in the ongoing chip war between the United States and China. The new restrictions target high-end AI systems and semiconductor equipment machinery used in the production of leading-edge chips in China. They aim to plug loopholes in previous sanctions that failed to curb Chinese manufacturing. The previous restrictions were based on bandwidth, allowing American chipmakers to easily create new chips with lower bandwidth to bypass the restrictions. The new rules avoid this loophole and restrict chips based on their total processing performance. They have serious implications for China’s ability to produce high computing machinery and limit its potential in AI-run machines and programs. The rules also restrict the sale of semiconductor manufacturing equipment, including etching tools, mask-making tools, and atomic layer deposition tools. The United States has extended the restriction on deep ultraviolet tools, affecting China’s ability to repurpose lagging-edge tools. The new restrictions create a black zone that completely restricts exports and a grey zone that allows exports with prior notice and examination. American chipmakers will have difficulty bypassing the restrictions, but there may still be loopholes in the U.S. sanctions. The rules will impact China’s semiconductor manufacturing and its ability to use American technology components and AI chips for military purposes. China will need to produce homegrown abilities in the AI industry and explore alternative AI techniques. The move will also impact the competitiveness of advanced chipmakers like Nvidia and AMD.
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