The Biden administration is set to announce a new rule next month that will expand US powers to restrict exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers. However, shipments from key allies such as Japan, the Netherlands, and South Korea will be exempt from the rule.
Key Highlights:
– The new rule aims to impede supercomputing and AI breakthroughs that could benefit the Chinese military.
– The Foreign Direct Product Rule will be expanded to include products made in foreign countries using American technology.
– Around 120 Chinese entities, including chipmaking factories and toolmakers, will be added to the restricted trade list.
– The rule is expected to be published in draft form next month and may be subject to changes.
Market Impact:
– Shares of major chip equipment manufacturers such as ASML and Tokyo Electron surged following the news.
– Other Japanese makers of chip-related equipment also made significant gains.
Global Implications:
– The move highlights the ongoing tensions between the US and China in the tech sector.
– The exemptions for key allies indicate the US is seeking to balance its national security objectives with diplomatic relationships.
– The rule may have significant implications for the global semiconductor industry and supply chains.