The U.S. is implementing new restrictions on China. Various components and tools used to manufacture chips will no longer be allowed to be exported, and more than 100 new Chinese companies will be blacklisted.
In the final days of his term, U.S. President Biden is tightening trade restrictions with China. Bloomberg knows. 27 new components and tools needed for chip fabrication will become subject to export restrictions. 140 Chinese companies will in turn end up on the Entity List: that’s a U.S. trade blacklist.
The focus for this package of restrictions includes the export of memory. HBM2 may no longer be exported. That applies to both U.S. companies and foreign companies that use U.S. products in one way or another. In practice, just about all major players in the chip world have to play by U.S. rules.
HBM2 memory, like other limited components, is used in high-end chips. The US mission is to slow down the development of such chips and associated (AI) technology in China as much as possible. Fearing that such technology could add value to the Chinese military, the US wants to stay at least one technology generation ahead of its rivals each time.
ASML and the Netherlands
There are exceptions to the rules. For example, Western companies are allowed to package HBM2 memory in China when there is little risk of the memory being diverted to domestic players. In addition, the U.S. provides restrictions for countries capable of imposing similar restrictions themselves.
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US tightens trade restrictions on China
These include Japan and the Netherlands. ASML, which manufactures the world’s most advanced lithography machines essential for chip production, is headquartered in Eindhoven. The U.S. appears to be putting the initiative for trade restrictions on the Dutch, although it is exerting some pressure so that they are imposed. Neither the Netherlands nor Japan, at this time, have said they will do so.
The trade war with China is primarily a U.S. issue. Companies like ASML are losing assured access to the Chinese market spurred by U.S. sanctions. Conversely, the supply chain of a great many Western products is extremely dependent on China, and it has sufficient resources at its disposal to strike back with its own restrictions. US strategic goals aside, there are thus mostly losers from the technology trade war.?