This week, Nvidia Corp, a chip design company, said the U.S. government advised it to limit exports to China of 2 computing chips for artificial intelligence work. It is the latest in a series of moves by the government to limit China’s entry to cutting-edge semiconductors.
The Commerce Department’s August declared that it would limit exports of materials & software used to produce next-generation chips, & current reporting from Reuters on other acts under consideration, set the stage for the letter to Nvidia as well as a similar letter to rival AMD, which would make it tougher for the Chinese semiconductor industry to compete on a global scale.
The U.S. warning to chipmakers may hinder Nvidia’s business in China by limiting the capabilities of domestic competitors to perform complex tasks like image recognition.
Without going into great detail, the Commerce Department official implied that the letters were part of a bigger effort targeting China: “While we are not in a position to outline specific policy changes at this time, we are taking a comprehensive approach to implement additional actions necessary related to technologies, end-uses, and end-users to protect U.S. national security and foreign policy interests.“
The agency reiterated its previous statements that it wanted to limit China’s access to weapons-relevant technology that can be used “to fuel its military modernization efforts.”
While Gina Raimondo, Commerce Secretary has said the agency “is pursuing strategies like ‘nearshoring’ and ‘friendshoring,’ so like-minded partners are integrated into our supply chains… As we rebuild our supply chains, we can’t be dependent on foreign countries that don’t share our values for our critical chip components.”
The United States claims that the manufacturing of modern semiconductors as well as gas turbine engines is crucial to its national security, therefore in August the department enacted new export curbs on these technologies, which were widely understood as being targeted at China.
Electronics design automation (ECAD) software, used for testing ICs and PCBs, is one of the boards “that can advance many commercial as well as military applications including defense and communications satellites,” the unit said at the time.
To better compete with China in the area of science & technology, Vice President Joe Biden quickly approved a bill that increased funds for research and development and subsidized the production of chips in the United States.
