The media reported that the administration of the President of the United States Joe Biden is currently considering the possibility of introducing additional restrictive measures regarding the possibility of China’s access to chip technologies.
The mentioned information was made public by journalists with reference to anonymous insiders who were aware of the intentions of the White House in the context of the practice of restraining Beijing’s technological potential within the framework of the concept of ensuring US national security. According to preliminary data, the new restrictive measures nowadays under consideration and exploring the prospects for their entry into force in the practical plane are focused on new hardware, which is now just beginning to emerge on the market.
Insiders, who used the right of anonymity because the intentions of the administration of the President of the United States are currently being discussed exclusively in private and do not belong to the category of publicly available information, said that the new regime of supply restrictions to China could potentially deprive the Asian country of the opportunity to use a cutting-edge chip architecture known as gate-all-around, or GAA. The mentioned architecture, according to the developers, can increase the power level of semiconductors. GAA is already being implemented by chip manufacturers.
Currently, there is no understanding as to when exactly US officials will make a final decision on new restrictive measures against China. It is worth noting that the probability and realism of such actions by Washington are fully consistent with the logic of its kind of sanctions practice against Beijing. The United States has already restricted the supply of many advanced chips to China. In addition, geopolitical tensions in the space of relations between Washington and Beijing are on a growth trajectory, which is why constraints are a logical continuation of the current situation.
Insiders claim that officials in the United States have not yet formed a final vision of what the scale of new measures against China should be. They also say that in this case, Washington’s goal is to make it difficult for Beijing to assemble sophisticated computational systems that are necessary for the development and implementation of the process of subsequent functioning of artificial intelligence models.
Moreover, according to insiders, the United States is interested in cordoning off still-nascent technology before it’s commercialized. It is possible that in this case, efforts are aimed at ensuring that it is China that loses the appropriate opportunity to extract financial benefits from the evolution of machine intelligence. It is also worth noting that the process of commercialization of artificial intelligence has already begun and is being carried out very intensively. Confirmation of this tendendency is that last week the market capitalization of Nvidia, the main supplier of graphic processing units (GPUs) for AI systems, exceeded the historical mark of $3 trillion.
Within the next year, many firms intend to integrate GAA technology into the mass production process of microcircuits. Nvidia, Intel, and Advanced Micro Devices (AMD) have declared their respective intentions together with partners, including Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics.
It is worth noting that the news about potential new restrictions on China’s access to chip technologies has become a factor in the negative impact on the securities of some companies. For example, at tradings in New York, the value of Nvidia shares fell by 2.5% to $118.74 per equity. AMD and Intel securities dropped by 1.9% and about 1%, respectively. This is a logical reaction of the value of stocks indicator to the intentions of the administration of the President of the United States, which were reported by the media with reference to insiders. The specified thesis is explained by the fact that China is one of the largest markets with which US technology companies actively interact. Also, these firms receive a significant part of their earnings in an Asian country. The mentioned companies are also interested in ensuring that relations between Washington and Beijing improve or at least find themselves on a trajectory of gradual normalization.
The loss of the ability to supply products to the Chinese market means a significant decrease in financial performance. US companies are also trying to continue to interact with customers in the Asian country, despite Washington’s restrictive measures against Beijing. For example, in November, the media reported that Nvidia was developing three artificial intelligence chips specifically for the Chinese market to continue its commercial activities in this country without violating the US supply regime for high-tech products already in force at that time, prohibiting the sale of many goods. At that time, information was spreading that the new microcircuits would be based on the H100 chip. In December, the media reported that Nvidia was developing a special version of the gaming microcircuit RTX 4090D, which has a lower level of productivity, to comply with export restrictions imposed by Beijing against Washington.
US Commerce Secretary Gina Raimondo has repeatedly stated the desire to make all necessary efforts to prevent China from accessing the most advanced artificial intelligence technologies. In this case, Washington fears that Beijing may use the specified technologies to strengthen its military capabilities, which is a very sensitive issue in the context of the current trend of growing tensions in the space of geopolitical relations. It is worth noting that the United States has restricted China’s access not only to advanced chips but also to the equipment necessary for the production of corresponding products. Washington’s allies have joined these measures. For example, in January, ASML, a manufacturer of microcircuit-producing equipment based in the Netherlands, announced that it had received an order from the government of the mentioned country to stop exporting some of its products to China.
In a sense, the Joe Biden administration is acting ahead of the curve in the context of restrictions on the supply of chips and equipment for making these high-tech goods to an Asian country. Washington is trying to prevent Beijing from accessing certain microcircuits even before the relevant products are actively distributed on the market. These efforts also extend to chip manufacturing technologies. The media note that the new restrictive measures, which, according to insiders, are currently under discussion, may be the move in the context of the political activity of the Joe Biden administration on the eve of the United States presidential elections scheduled for November. At the same time, the scaling up of Washington’s limitation practices towards Beijing already belongs to the category of what can be described as an established practice.
A spokesperson for the US Commerce Department’s Bureau of Industry and Security, which oversees export controls, did not respond to a media request regarding new measures reducing the volume of high-tech products supplied to China. A representative of the National Security Council also did not provide any comment on a similar issue.
Insiders reported that the Bureau of Industry and Security has sent the draft GAA rules to the so-called technical advisory committee, which includes industry experts who make recommendations on specific technical parameters that are agreed upon at the closing stage of the regulatory process. At the same time, media informants claim that the specified rules have not yet been finalized. According to them, industry representatives negatively perceived the first version of the draft regulation of the use of GAA in the global space, describing this initiative as excessively broad.
There is currently no understanding as to whether the new restrictive measures will have an impact on China’s ability to elaborate its own GAA chips and to sell these products on the international market. It is also unknown how the regulations under consideration will affect the supply of microcircuits from foreign companies to electronics manufacturers from the mentioned Asian country.
Some insiders say that the restrictive measures currently being discussed by the White House do not imply an outright ban on the export of GAA chips. According to them, the limitations will focus on the technology needed to manufacture the mentioned microcircuits.
Insiders also say that at an early stage of conversations, the issue of restricting the export of high-bandwidth memory chips is being discussed. In this case, it means microcircuits manufactured by SK Hynix, Micron Technology, and others. Such chips speed up memory access and help bolster artificial intelligence accelerators. These microcircuits are used to train machine intelligence software, which is a process involving bombarding models of advanced technology with information.
Insiders say that there is currently no understanding of the prospects for the possibility of agreeing on rules regarding high-bandwidth memory chips. The discussion of microcircuits GAA export standards is ongoing and it is not yet known when this process will end.
Insiders also say that some allies of the United States are applying their own measures to control the export of GAA technologies, agreed upon following trade negotiations. It is worth noting that the US already has restrictions on the development of software for the mentioned technology, which came into force in 2022.
