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December 4, 2024 | 01:38 pm
TEMPO.CO, Jakarta - The United States tightened export restrictions on the semiconductor industry in China on Monday, December 2, 2024. As reported by Reuters, this move curbed exports to 140 companies, including chip equipment makers Naura Technology Group (002371.SZ), Piotech (688072.SS), and SiCarrier Technology.
The move is one of the Biden administration's last large-scale efforts to stymie China's ability to access and produce chips that can help advance artificial intelligence for military applications or otherwise threaten U.S. national security.
The move is one of the Biden administration's last large-scale efforts to stymie China's ability to access and produce chips that can help advance artificial intelligence for military applications or otherwise threaten U.S. national security. Chip manufacturing equipment made in countries such as Singapore, Malaysia, Israel, Taiwan, and South Korea is also subject to these new regulations. Only the Netherlands and Japan are exempt.
Furthermore, more than 100 Chinese semiconductor companies, such as Swaysure Technology Co, Qingdao SiEn, and Shenzhen Pensun Technology Co, as well as two investment companies, Wise Road Capital and Wingtech Technology Co (600745.SS), have been added to the Entity List. Companies on this list are prohibited from receiving supplies from the U.S. without a special license.
This policy also affects China's largest chip manufacturer, Semiconductor Manufacturing International (0981.HK), which was previously included in the Entity List in 2020. This new policy eliminates the loopholes that allowed the company to continue receiving goods with special licenses.
These restrictions are expected to impact global companies such as Lam Research (LRCX.O), KLA (KLAC.O), Applied Materials (AMAT.O), as well as non-U.S. equipment manufacturers like ASM International (ASMI.AS). Memory chip manufacturers like Samsung Electronics (005930.KS), SK Hynix, and Micron are also expected to be affected, especially concerning HBM2 and higher technology restrictions.
These chip export restrictions mark the Biden administration's third major policy regarding chip exports to China, following a series of controls in 2022 that constituted a significant change in U.S. technology policy since the 1990s.
Although China continues to accelerate efforts to become self-reliant in the semiconductor sector, the country still lags behind global industry leaders like Nvidia (NVDA.O) and ASML (ASML.AS).
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