The Biden administration announced plans to expand US export restrictions on semiconductor shipments to China.

Joe Biden's administration plans to expand restrictions on shipments to China of semiconductors used for artificial intelligence and chip production equipment, the Commerce Department announced. The new rules will formalize restrictions already indicated in letters sent to three U.S. semiconductor equipment manufacturers: KLA Corp, Lam Research Corp, and Applied Materials Inc. The regulations will prohibit these companies from exporting chipmaking equipment to Chinese firms that manufacture advanced semiconductors with a process technology smaller than 14 nanometers without obtaining a Commerce Department license.

The upcoming formal rules represent a shift from the current use of "informed letters," which allow the Commerce Department to bypass lengthy rule-writing processes and quickly impose controls but apply only to companies that receive them. Some sources indicated the rules are likely to include additional measures against China, though the specific nature of these measures and the publication timeline remain uncertain and could change.

Beyond restrictions on equipment exports, the rules could also impose licensing requirements on shipments to China of products containing advanced chips. This could affect three major data center server manufacturers—Dell Technologies, Hewlett Packard Enterprise, and Super Micro Computer—that produce systems containing the Nvidia A100 chip. A Commerce Department spokesman declined to comment on specific rules but stated the agency is "taking a comprehensive approach to implementing additional actions ... to protect U.S. national security and foreign policy interests, including to prevent China from acquiring American technology."

China's response was swift and critical. Liu Pengyu, a spokesman for China's embassy in Washington, said China "opposes the abuse of export controls by the United States to restrict exports of semiconductor-related goods to China," arguing the restrictions "violate the rules of international trade and hurt global growth for both U.S. and Chinese companies." The Biden administration's broader strategy aims to thwart China's technological advances by targeting technologies in which the United States still retains dominance.