U.S. Considers New Restrictions on China’s Access to Advanced AI Chips

The United States is considering imposing additional restrictions on China's access to advanced artificial intelligence (AI) chip technology. This move, reported by Bloomberg on Tuesday, aims to limit China's ability to obtain and develop cutting-edge chip architectures crucial for AI advancements.

The Biden administration is specifically targeting a sophisticated chip architecture known as gate all-around (GAA), according to Bloomberg sources familiar with the matter. GAA represents a new type of transistor architecture that promises improved performance and reduced power consumption. This advanced technology is seen as vital for the development of next-generation AI systems.

South Korean tech giant Samsung Electronics has already commenced production of 3-nanometer chips utilizing GAA technology. Taiwan Semiconductor Manufacturing Company (TSMC) also plans to incorporate GAA in its forthcoming 2-nanometer chips, highlighting the significance of this architecture in the semiconductor industry.

On Wednesday morning in Asia, shares of TSMC and Samsung Electronics saw modest gains, rising 1.6% and 0.4%, respectively, reflecting market reactions to the news.

While the U.S. is still determining the exact scope of the potential new restrictions, the measures are expected to complicate China's efforts to assemble advanced computing systems essential for developing and operating sophisticated AI models. The timeline for finalizing these restrictions remains unclear.

The U.S. Department of Commerce and the Bureau of Industry and Security, which oversee export controls, did not immediately respond to requests for comment from CNBC.

The potential new restrictions are part of a broader strategy to curb China's access to key technologies. In October 2022, the U.S. introduced a series of export controls aimed at restricting China's access to advanced chip technology, particularly those used in AI applications. These controls were tightened further in October last year, targeting shipments of advanced AI chips from companies like Nvidia to China.

Bloomberg reported that a draft version of the proposed GAA restrictions was considered overly broad. It remains uncertain whether the final measures will specifically target China's GAA development capabilities or if they will also prevent foreign companies from selling GAA technology to China.

China, in response to these restrictions, has been ramping up its efforts to achieve self-reliance in semiconductor technology. In May, China announced a third semiconductor fund, worth 344 billion Chinese yuan ($47.5 billion), to bolster its domestic chip production and technological self-sufficiency. This move underscores China's determination to advance its semiconductor capabilities amidst increasing foreign restrictions.

The international context of this tech competition is further illustrated by actions from other countries. Earlier this year, the Dutch government barred semiconductor equipment maker ASML from exporting certain tools to China, aligning with the broader strategy of restricting China's access to critical semiconductor technologies.

These developments highlight the ongoing tech rivalry between the U.S. and China, particularly in the field of AI and semiconductor technology. As both nations strive for dominance in these critical areas, the implementation of further restrictions could significantly impact the global technology landscape.