The updated controls revise the October 7th, 2022, chip export regulations targeting China which were first introduced by the Biden administration 1 year ago. The restrictions target chips made by Nvidia Corp. but could also affect chips sold by Intel and AMD, among other companies. The restrictions also place limits on exports to Chinese artificial intelligence chip companies, Shanghai Biren Intelligent Technology Co. and Moore Threads Intelligent Technology Beijing Co., which are seen as competitors to Nvidia.
The new regulations:
- Include a new performance density threshold (there are now 2 benchmarks—performance density and the preexisting performance threshold) above which companies must get a license to export the product;
- Include a notification requirement for companies that sell chips below these performance thresholds—called the “gray zone.” These chips may still have national security uses and the U.S. government is looking to collect additional information on flows of these products. The government hopes to review notifications within a 25-day period.
- Prevent circumvention by requiring a license for exports to companies domiciled in over 40 additional at-risk countries;
- Also expands restrictions to companies domiciled in areas covered by U.S. arms embargo, including Hong Kong and Macau;
- Expands the list of controlled semiconductor manufacturing equipment; and
- Adds 13 new companies to the Entity List.
After receiving public input on the initial regulations, the revised restrictions generally permit the sale of advanced chips for use in commercial applications, such as in smartphones, computers, and electric vehicles. However, the Biden Administration will impose limitations on the most advanced consumer chips, such as those used in AI data centers. While high-end chips are the preferred choice for powering AI models, less advanced chips could be repurposed for AI and supercomputing with some investment.