Biden Administration to Expand Chip Export Controls Aimed at China

The Biden administration is set to expand export controls on semiconductor manufacturing equipment to Chinese chipmakers next month. The planned rule seeks to restrict China's access to advanced chipmaking technology while excluding key allies like Japan, the Netherlands, and South Korea. This move aims to curb China's progress in supercomputing and AI, which could benefit its military.

The Biden administration plans to introduce a new rule next month to expand U.S. powers aimed at curbing semiconductor manufacturing equipment exports to Chinese chipmakers, according to two sources familiar with the matter. Exports from key allies like Japan, the Netherlands, and South Korea will be exempted, sources said.

Consequently, major chip equipment manufacturers such as ASML and Tokyo Electron will not be impacted by the rule change, with shares in both companies surging following the news. The rule expands what is known as the Foreign Direct Product rule, potentially impacting about half a dozen Chinese fabs involved in advanced chipmaking, one source noted.

Countries that would see exports affected include Israel, Taiwan, Singapore, and Malaysia. Reuters could not confirm which Chinese chip fabs would be targeted. A U.S. Commerce Department spokesperson declined to comment on the matter.

(With inputs from agencies.)