December has arrived, and the current American government has less and less time to implement its previously planned plans, since US President-elect Donald Trump will form a new government in January. The sanctions currently being prepared against the Chinese semiconductor sector should affect 140 companies from the Middle Kingdom, specializing in the production of equipment for the production of chips and the microcircuits themselves.
Image source: Tokyo Electron
Reuters, which has already seen the list of proposed new restrictive measures against China, explains that the new package of sanctions has two goals. Firstly, China must be left without access to advanced memory chips and their production technologies. Secondly, Chinese equipment manufacturers for the production of various chips should suffer. The current US government’s proposed restrictions on China should be its latest attempt to curb the technological development of this geopolitical opponent. The new US government under Trump will begin to develop its own measures in this area. It is expected that there will be no waiver of the restrictions adopted under Biden.
American officials have foreseen a ban on the supply of advanced HBM-type memory chips for the needs of Chinese customers, and the list of chip production equipment prohibited for supply to China includes 24 new types of systems, as well as three software tools. It will be prohibited to import chip production equipment into China through Malaysia and Singapore. In addition to American companies, new restrictions may affect the interests of the Dutch ASML.
The sanctions list will be replenished with more than 20 Chinese semiconductor manufacturers, two investment companies and more than a hundred manufacturers of equipment for producing chips. The sanctions will affect several Chinese companies suspected of having ties to Huawei Technologies. It is expected that existing sanctions against China’s largest contract chip manufacturer, SMIC, will be strengthened in the sense that its partners will lose the ability to coordinate the supply of equipment and chips through obtaining export licenses from the US Department of Commerce.
It is noteworthy that the Netherlands and Japan have not yet come under the special US export control rule, which gives the authorities in this country the ability to block the export to China of equipment made in third countries such as Israel, Singapore, Malaysia, Taiwan and South Korea. For this, it is enough that such equipment contains components or technologies of American origin. However, even in this case, special control is introduced only over the supply of such equipment to 16 very specific Chinese companies. Japan and the Netherlands will not yet supply their equipment to China under this scheme, maintaining the same conditions. However, US authorities expect that countries exempt from this restriction will themselves introduce similar rules.
Restrictions in the supply of memory now apply to chips of the HBM2 generation and later. They are produced by only three companies in the world: South Korean Samsung Electronics and SK hynix, as well as the American Micron Technology. Experts believe that the new restrictions will primarily affect Samsung’s interests. Micron products are subject to Chinese sanctions, so in the new conditions, local HBM2 consumers have to rely only on the ability of the Chinese company CXMT to launch production of such chips over the next two years. Of course, CXMT is also under American sanctions, and therefore it will be extremely difficult for it to launch the production of HBM2.