Exclusive | With China in sights, US plans curb on countries’ advanced semiconductor access: sources

In a second escalation of chip restrictions this month, the US is planning to close sourcing loopholes through third-party countries, sources say

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As the US has sought to curb China’s access to advanced semiconductors, the smuggling trade for these chips has grown. Photo: Shutterstock

Published: 1:00pm, 12 Dec 2024Updated: 1:34pm, 12 Dec 2024

The US government plans to issue a new rule before the end of this month aimed at curbing Chinese companies’ sourcing of advanced artificial intelligence (AI) chips from unrestricted third-party countries, according to sources.

The new export control measure will focus on controlling the global shipments of powerful graphics processing units (GPUs) that have become instrumental in the training of AI models, closing loopholes in existing rules, according to two people familiar with the matter, who declined to be named because of the sensitivity of the matter. The goal is to regulate the “diffusion” of US products, helping ensure the country maintains global AI leadership.

The date of implementation remains subject to change as the measure has not been finalised. However, if confirmed, it would be a rapid escalation from the last round of chip-related sanctions that came earlier this month.

On December 2, the administration of outgoing US President Joe Biden added 140 Chinese organisations working in semiconductors to a trade blacklist and banned sale of high-bandwidth memory chips to China. In response, China restricted US-bound exports of critical minerals including graphite, launched an antitrust investigation into GPU designer Nvidia over a previously approved merger deal, and saw industry associations urge caution in purchasing US chips, referring to them as “unreliable”.

US Secretary of Commerce Gina Raimondo speaks at the convening of the International Network of AI Safety Institutes in San Francisco on November 20. Photo: AP

The rule was drafted with input from US Secretary of Commerce Gina Raimondo and National Security Adviser Jake Sullivan, both considered China hawks, according to one of the sources.

The US Department of Commerce declined to comment on Wednesday.