These new regulations could prove to be the most expansive decision taken in the Biden administration to block Chinese access to American technology that powers data centers as well as supercomputers.
It is expected that the Biden administration is scheduled to announce new rules to block Chinese businesses from having access to the technologies that allow high-performance computing. This is according to people who know about the issues that the U.S. is facing. the latest in a string of measures aimed at thwarting China’s plans to develop new-generation weapons and automate massive-scale surveillance systems.
The proposed measures are expected to be announced as early as next week and could be among the most important steps that the Biden administration to block China’s access and use of advanced technology in semiconductors. They will take advantage of the policy of the Trump administration that dealt the nail to Huawei Chinese company that makes telecoms Huawei by banning companies from around the world from supplying it with products manufactured with the help of American technology machines, software, or equipment.
Many Chinese companies, research labs, and other organizations are likely to face limitations similar to Huawei According to two sources who have information about the plans. The effect is that any company that makes use of American technology would be barred from selling its products to Chinese companies which are being under the administration’s scrutiny. It’s not clear yet what Chinese laboratories and companies would be affected.
The vast expansion of what’s called”the foreign direct products rule” is but one aspect of Washington’s proposed restrictions. The administration will also attempt to limit the sale of the most cutting-edge U.S.-made tools to China’s local semiconductor industry.
Washington also plans to restrict U.S.-made microchips from selling to China’s most powerful supercomputing and data centers projects, as reported by the sources. The restriction could hinder the ability of the top Internet companies and academic institutions such as Alibaba and Tencent to acquire the components they require to build the most powerful supercomputers and data centers.
As supercomputer performance increases the limit could severely limit China’s capacity to develop the advanced technology of number crunching which is the basis of breakthroughs across a range of fields, including biological sciences, artificial intelligence, and even missile design. Chips and chip-making tools were previously reported through Reuters.
The Biden administration is also making preparations for an executive order to allow the government to investigate the investment decisions that U.S. businesses made abroad to address security concerns, as well as looking at different measures that could be applicable to the Chinese manufacturer of memory chips Yangtze Memory Technologies Company, or YMTC numerous people knowledgeable about the discussions said.
Orville Schell, a longtime China scholar at the Asia Society, said the American government is moving to create a separation between American from Chinese supply chains of semiconductors and semiconductor technologies, due to their importance, not only in national economies but as well for weapons systems and other applications for military use.
In the last one or 2 months, U.S. officials have been increasingly concerned about Chinese companies that produce mid-range semiconductors, and not only the tiniest, most advanced technology the company has, but Mr. Schell also said. This is because these older models are still vital elements for weapons. Moreover, officials don’t need Chinese chipmakers to utilize technology developed in the United States or partner nations to make the chips. They are not in favor of Chinese companies transforming into global suppliers.
“That’s quite a remarkable expansion of our concerns,” said the CEO, adding that YMTC was an excellent illustration of this type of business.
The White House declined to comment on the restrictions that are planned. A spokesperson from the Bureau of Industry and Security within the Commerce Department, which has power over the kinds of technology companies can export outside of the United States, said they did not have any confirmation at the moment.
If they are enacted, these measures could be the most aggressive effort to date from to date by the United States to hit China’s booming supercomputer and data centers market. A large number of Chinese government-owned universities, state-run businesses, and online companies run supercomputers with a variety of capabilities. Many are utilized for crucial but not-so-important, tasks such as studying traffic and managing social networks, or forecasting weather. However, researchers and analysts have demonstrated that some are being employed for more sinister motives.
China has employed a number of supercomputers to power intrusive surveillance systems targeting ethnic minorities. Other supercomputers have been utilized by Beijing to study nuclear blasts and develop next-generation weapons which could be able to evade American defenses.
For instance within the western Chinese zone of Xinjiang in which many thousands of Uyghurs from minority groups are being monitored and interned the supercomputer constructed with chips from Intel or Nvidia is being used to process video footage gathered from the many video cameras found within the region. Both Intel, as well as Nvidia, have stated that they had no idea about the misuse of their tech.
The U.S. government has sought to limit access to technology in projects such as these in recent years, however, these efforts have been thwarted due to the availability of high-powered microchips.
Many of the items offered to China are made outside of the United States, meaning the U.S. government’s traditional methods of regulation, which are focused on goods that are exported by China to the United States, don’t apply. Therefore, officials from both the Trump as well as Biden administrations have shifted to using the rule of foreign direct products an expansive rule that prohibits products manufactured from anywhere around the globe that is made with or without the help of U.S. technology, machinery, or software from being exported to China. Even semiconductors made by other nations are usually produced using U.S. equipment and software.
It is no secret that the Biden administration has been criticized by some critics for moving in a slow manner to restrict China’s access to U.S. technology. Many administration officials believe that the recent progress made by China in breaking through a crucial technological obstacle in the field of semiconductor manufacturing has highlighted the necessity for more comprehensive regulations in the field those who have been involved in the debates claimed.
The export control measures constitute a larger strategy by the Biden administration to deprive China of essential technologies, as well as pumping funds into U.S. factories that make chips. The new measures occur in the midst of Beijing increasing its military campaign against Taiwan as it is the largest producer of the world’s most advanced semiconductors.
In remarks to the White House last month, Jake Sullivan, the national security advisor, said that the U.S. government had previously attempted to be one generation ahead of its competitors in key technology areas but the strategy wasn’t as effective anymore.
“Given the foundational nature of certain technologies, such as advanced logic and memory chips, we must maintain as large of a lead as possible,” said the CEO.
It is believed that the Biden administration has pointed to its extensive use of export control as an effective tool to take on Russia over its ongoing invasion of Ukraine and claims it will hinder Russia’s defense technology, energy, as well as other crucial sectors over the long-term. American officials have said they could use the same method as other nations that are competing particularly China in order to tackle issues of national security. The officials claim that they believe that the Trump administration’s use in implementing export controls targeted at deterring Huawei could be a template in the way they developed the rules for Russian businesses.
In the last month, The Biden administration introduced new restrictions on the sales of certain computer chips that are sophisticated in China as well as Russia. The restrictions were aimed at high-end models of chips referred to as graphics processing units, sold by Silicon Valley companies like Nvidia and Advanced Micro Devices. The devices, which were originally designed for rendering images in video games, are now essential for computers with large capacities which are used to train Artificial Intelligence algorithms.
Paul Triolo, senior vice president for China at Albright Stonebridge Group, a firm that specializes in strategy, said this is “probably the strongest sort of regulatory and export control statement that the U.S. government has made with respect to China’s access to U.S. technology,” and that it came in a delicate moment for the Chinese leadership ahead of a conference of the 20th Congress of the Communist Party, which will begin on Oct. 16.
“The administration,” he stated, “is putting its foot down here.”