Although it has not been officially confirmed yet, Reuters Reportedly, the Biden administration is preparing a new set of penalties that would halt exports of AI-capable semiconductors below 14 nm and chip manufacturing equipment.
The Commerce Department has sent letters to some of the biggest companies in the industry that work with China and supply chips to companies in China. The companies, which include NVIDIA, ADM and Intel, have publicly acknowledged the letters, but most officials declined to comment.
This is similar to current restrictions that allow US companies to do business with China only after approval from the Commerce Department.
These letters are common practices that ensure prompt execution, but only the companies that receive the letter are obliged to comply. Meanwhile, the Commerce Department is working with the Biden administration on industry-wide rules that are expected to be unveiled next month.
Some believe that even American companies using such chips will be barred from entering the Chinese market. Such companies include Dell, HP and Super Micro Computer.
If this goes into motion, it will pose a problem for China because despite technological advances and manufacturing capabilities, no single Chinese company has the know-how or equipment to produce competitively sophisticated chips at scale. This industry is dominated by the US, South Korea and Taiwan. So this ban could act as a stumbling block for China.
Biden’s office is seeking support from its allies outside the US to make the ban more effective.