The Biden administration is reportedly mulling tighter restrictions on AI microchip exports to Chinese companies, a move aimed at closing a loophole allowing some firms to access advanced technology through their overseas units.
This is according to an exclusive report posted by Reuters today, which details how Chinese companies are circumventing existing restrictions through their overseas subsidiaries, accessing and potentially smuggling the restricted semiconductors into China.
Last year, the US imposed restrictions on shipments of AI chips and chipmaking tools to China, a decision rooted in national security concerns and aimed at curbing China’s military advancements.
Under existing sanctions, previous-generation and less-powerful microchips designed by Nvidia, Intel and AMD, and manufactured by Samsung and TSMC, can still be exported to China, leaving the bleeding-edge designs out of the country’s grasp.
But these sanctions don’t extend to the overseas units of Chinese companies, causing questions about their effectiveness.
State-backed Chinese tech giant Huawei caused political shockwaves after releasing its Mate 60 Pro smartphone in September, when a teardown of the handset revealed a seven-nanometer microchip, a level of technology that the US has sought to prevent from entering China through these sanctions.
Questions have arisen as to how Huawei managed to breach the seven-nanometer threshold while these export controls were in place, given China’s lack of domestic microchip design capabilities.
The US government and South Korean chipmaker SK Hynix launched investigations into the matter after the Semiconductor Industry Association warned of an underground semiconductor railroad, backed by state financial support, aimed at obfuscating supply lines.
According to the Reuters sources, the Biden administration is preparing to announce harsher export controls in the coming days.