The US government has closed a loophole in export restrictions on the most powerful semiconductors, saying they also cannot be sold to companies headquartered in China. This was announced at the weekend by the Bureau of Industry and Security (BIS), a branch of the Ministry of Commerce. It makes it clear that a license is required for the export of sophisticated computer components if they are to go to companies whose headquarters are in sanctioned countries such as China or Macau. The statement suggests that this loophole has so far been used to ultimately export such semiconductors to China. This is a clarification, not a new rule.
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Only softened a year ago
The move comes about a year after US President Donald Trump’s administration eased his predecessor’s export restrictions on the most advanced semiconductors for the AI industry. At that time, a regulation was overturned, according to which they could not be delivered to countries from which they could get to China. It is unclear how many have gotten there since then and then possibly into the People’s Republic. However, the Reuters news agency quotes an anonymous expert from the industry as estimating that it could be in the hundreds of thousands. According to the statement, data centers do not have to stop using such technology. Meanwhile, an industry expert pointed out another gap to Reuters: Manufacturers like TSMC still don’t have to check who their chips are intended for.
Nvidia’s most modern semiconductors are irreplaceable in the AI development race, which is why the US government has been trying to cut off supplies to China for years. The measure now indicates that the Trump administration wants to continue to take a tough course, even though the US President has recently tried to reduce conflicts with the People’s Republic. Nvidia had recently tried to regain a foothold in the Chinese market. The group once did billions in business there until the disputes largely brought business to a standstill.
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