Volkswacht Bodensee - US tightens controls on advanced chips to curb flow to China

The move -- part of a series of actions before President Joe Biden leaves office -- comes days after US officials announced fresh curbs on AI chip exports, seeking to make it harder for Beijing to access the advanced technology.

"These rules will further target and strengthen our controls to help ensure that the PRC and others who seek to circumvent our laws and undermine US national security fail in their efforts," Commerce Secretary Gina Raimondo said, referring to the People's Republic of China.

Washington has expanded its efforts in recent years to curb exports of state-of-the-art chips to China, concerned that these can be used to advance Beijing's military systems and other tech capabilities, but there have been worries about circumvention.

The latest controls aim to hold back China from getting high-end advanced computing semiconductors needed to develop tech like advanced artificial intelligence, the Commerce Department said.

"By enhancing due diligence requirements, we are holding foundries accountable for verifying that their chips are not being diverted to restricted entities," said Alan Estevez, Commerce Department under secretary for industry and security.

But the outgoing Biden administration's moves have drawn ire, with China's Ministry of Commerce saying Beijing was "strongly dissatisfied and firmly opposed" to them.

The ministry vowed in a statement Wednesday that China would take measures to safeguard its interests.

With the new rules, foundries and packaging companies that want to export certain advanced chips face broader license requirements unless they meet several conditions.

The rules also aim to enhance reporting for transactions of newer customers "who may pose a heightened risk of diversion," said the US Commerce Department.

- Security risk -

The department on Wednesday placed additional entities on a list imposing trade restrictions amid concerns that they were acting to help further Beijing's goals of indigenous advanced chip production. Most were China-based but two were in Singapore.

This "poses a risk to US and allied national security," said the Commerce Department.

Apart from chip export controls, the United States finalized a rule this week effectively barring Chinese technology from cars in the American market.

The announcement took aim at software and hardware from the world's second biggest economy over national security risks too.

Meanwhile, Washington is mulling new restrictions to address risks posed by drones containing tech from adversaries like China and Russia.

Beijing said Wednesday that the Biden administration's measures have "seriously infringed upon" Chinese companies' rights and interests.

But the rollout of many plans will fall to President-elect Donald Trump, as he returns to the White House next week.

T.Germann--VB