US finalizing new rules to tighten chipmaking restrictions on China

An updated rule curbing exports of U.S. chipmaking equipment to China is in the final stages of review, according to a government posting and a source, a sign the Biden administration is poised to soon tighten restrictions on Beijing.

Reuters exclusively reported on Monday that U.S. officials had warned China in recent weeks to expect rules restricting shipments of semiconductor equipment and advanced AI chips to China to be updated this month.

The updates would add restrictions and close loopholes in rules first unveiled on Oct. 7, 2022, sources say. Those rules angered Beijing and further strained relations with Washington.

A regulation titled, “Export controls to Semiconductor Manufacturing Items, Entity List Modifications,” was posted on the Office of Management and Budget (OMB) website on Wednesday.

A person familiar with the matter, who requested anonymity, confirmed the posting refers to the expected restriction on sending chipmaking tools to China.

Export control rules are generally not posted by OMB until there is agreement between the Departments of State, Defense, Commerce and Energy on their content, former officials said.

An anticipated companion rule updating restrictions on exports of high-end chips used for artificial intelligence has yet to be posted by the government.

A source said the Biden administration is seeking to publish both rules simultaneously. A spokesperson for the U.S. Department of Commerce declined comment. Reuters