Trump team seeks to toughen Biden’s chip controls over China
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The Trump administration is eyeing more Nvidia curbs and Chinese company sanctions.
PHOTO: REUTERS
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WASHINGTON - The Trump administration is sketching out tougher versions of US semiconductor curbs and pressuring key allies to escalate their restrictions on China’s chip industry, an early indication the new US President plans to expand efforts that began under Mr Joe Biden to limit Beijing’s technological prowess.
Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron and ASML Holding Engineers from maintaining semiconductor gear in China, according to people familiar with the matter.
The aim, which was also a priority for Mr Biden, is to see key allies match China curbs the US has placed on American chip-gear companies, including Lam Research Corp, KLA Corp and Applied Materials.
The meetings come in addition to early discussions in Washington about sanctions on specific Chinese companies, other people said.
Some Trump officials also aim to further restrict the quantity and type of Nvidia chips that can be exported to China without a licence, said some of the people.
The broad goal in Washington is to prevent China from further developing a domestic semiconductor industry that could boost its artificial intelligence and military capabilities – and President Donald Trump appears to be picking up where Mr Biden left off.
In some areas, that means pursuing agreements with allies that never came to fruition in the prior administration. In others, it means adopting the priorities of the more hawkish members of Mr Biden’s team, who were unable to build internal consensus on their more aggressive policy aims.
A White House representative did not immediately respond to a request for comment. The Dutch Foreign Trade Ministry and the Japanese Ministry of Economy, Trade and Industry declined to comment.
It could take months before the talks produce any new US regulations, as Mr Trump makes staffing decisions at key federal agencies.
It also remains to be seen whether allies will be more receptive to the new leadership in Washington.
The prior administration had reached a handshake agreement with The Hague on limiting gear maintenance in China, but the Dutch demurred after Mr Trump won the election, two senior Biden officials said.
Without regular maintenance and servicing, chip-making equipment from ASML and others can quickly lose its ability to meet the rigorous demands of producing semiconductors.
Some officials on Mr Trump’s team also want to intensify restrictions on Semiconductor Manufacturing International Corp (SMIC), the main chipmaking partner to Chinese telecom giant Huawei Technologies.
Mr Biden effectively blocked shipments to some SMIC facilities but established case-by-case reviews for others, which the officials worry could allow SMIC to purchase tools that are ultimately used at restricted plants.
The new administration is also eyeing curbs on sales of chips that Nvidia designed specifically for China, Bloomberg has reported.
Some of Mr Biden’s National Security Council officials wanted to impose those tighter measures before leaving office, several people said, but then Commerce Secretary Gina Raimondo declined to pursue them.
Then there is the so-called AI diffusion rule, imposed in the final week of Mr Biden’s term.
The measure divided the world into three tiers of countries and set maximum thresholds for the AI computing power that can be shipped to each. It also established mechanisms for companies to validate the security of their projects and access higher compute limits.
The rule, which will impact data centre developments everywhere from South-east Asia to the Middle East, drew a harsh rebuke from companies including Nvidia, where chief executive Jensen Huang expressed optimism that the Trump administration would opt for a lighter regulatory touch.
The White House is now seeking to streamline and strengthen that framework, according to several people familiar with the conversations, although what that entails is still in flux.
One idea favoured by some in the administration would be to reduce the computing power that can be exported without a licence.
Under the current restrictions, chipmakers only have to notify the government before exporting the equivalent of as many as 1,700 graphic processing units to most countries.
Some Trump officials want to reduce that threshold, people familiar with the matter said, which would expand the scope of the licence requirement. BLOOMBERG
